Birkoa Newsletter 53 (end April 2026)
Performance Snapshot & Key Highlights
April 2026 Performance: +32% net (Main Fund), +15% net (Delevered Fund)
Year-to-Date: Main Fund +10% net; Delevered Fund modestly positive
Inflection Point: First positive month after five consecutive declines since October 2025
Strategic Shift Validated: Exit from software AI positions avoided further downside
Capital Rotation: Successfully exited oil near highs; redeployed into semiconductors at lows
Core Drivers: Strong rebound in AI and chip names (Intel, SanDisk, Micron)
International Exposure: Japan continues to outperform; China remains a long-term optionality play
Portfolio Resilience: Near prior highs despite Palantir and crypto remaining ~40–50% below peaks
Forward Setup: Multiple dormant drivers (Palantir, crypto) create significant upside potential
April as an Inflection Point
April 2026 marked a crucial inflection for us. After five consecutive negative months since October 2025, we closed April firmly positive. The main fund delivered over 32% net for the month, while the delevered fund achieved over 15% net. As a result, the main fund now stands at 10% net year-to-date, and the delevered fund has moved back into positive territory, modestly above breakeven.
This was not a random recovery. It was the direct result of positioning, patience, and disciplined capital reallocation now beginning to express itself.
Reaffirmation of Prior Strategic Shift
In the prior newsletter, we outlined a decisive pivot away from software-heavy AI exposure. After nearly three years tracking these names, it became increasingly clear that a broad swath of software AI companies were unlikely to recover in a meaningful way.
We exited approximately 80% of those positions, including Atlassian, Salesforce, C3.ai, and GitLab, while retaining only smaller exposures to Snowflake and MongoDB.
Over the past several months, this decision has been validated. The names we exited have continued to trend lower. Even the positions we retained have declined further, but given our significantly reduced exposure, the impact on the portfolio has been minimal.
This reset freed up capital for higher-conviction opportunities.
Macro and Geopolitics: Filtering Noise from Signal
The most visible external variable over recent months has been geopolitical volatility, particularly surrounding the Iran situation.
Our view has remained consistent: much of this activity is driven by signaling rather than structural change. As markets began to recognize this—specifically, that the situation was more bark than bite—volatility subsided.
This normalization allowed underlying fundamentals to reassert themselves, directly contributing to April’s strong performance.
A key beneficiary was our long-standing oil position. Since the fund’s inception in May 2022, oil had delivered limited gains. During the recent geopolitical spike, we were able to exit near relative highs. While prices have since revisited those levels, they have not materially exceeded them.
We then redeployed that capital into semiconductor and chip names—such as ARM and Intel—at or near local lows. These positions have since rebounded significantly, forming a core driver of the April recovery.
AI and Semiconductor Positioning
Our central thesis remains anchored in the structural demand for compute, memory, and AI infrastructure.
In late January, following a roughly 15% post-earnings decline, we initiated a position in Intel using redeployed capital. This reflects our broader approach: systematically leaning into weakness in structurally important names.
We applied the same framework across the semiconductor ecosystem:
SanDisk, initiated near January lows, is now up over 100% year-to-date
Micron and other memory-focused positions have performed exceptionally well
Core chip exposure continues to benefit from sustained demand for AI infrastructure
We have also selectively expanded into more asymmetric opportunities, including Marvell Technology and AppLovin. These names are more volatile by design, but they offer outsized upside potential.
The portfolio is intentionally structured so that:
Core positions provide stability and directional exposure
Select positions offer nonlinear upside
If these asymmetric names perform, they could resemble trajectories seen in companies like NVIDIA. If they do not, the broader portfolio remains resilient.
While the fund is currently up 10% year-to-date, the embedded optionality within these positions creates the potential for another outsized year.
International Exposure: Japan and China
Outside the U.S., our largest exposures remain Japan and China.
Japan continues to perform strongly. Many of our “Japanese” exposures function as global AI proxies rather than purely domestic plays. A core example is SoftBank, which effectively operates as an AI investment vehicle.
Japanese semiconductor and electronics companies also continue to benefit from global demand trends.
The currency dynamic adds an additional layer: yen weakness creates the potential for future gains upon repatriation if normalization occurs.
China, by contrast, has been more muted. Several positions are below prior highs, which is acceptable within our framework. Our exposure is structured as strategic optionality, not dependency.
Longer-term tailwinds remain intact:
Continued policy support and liquidity injections
Strength in manufacturing and exports
Growth in sectors such as food security
Rapid development in domestic AI capabilities
Notably, U.S. restrictions have accelerated internal innovation. While near-term performance has lagged, the long-term setup remains compelling.
Portfolio Resilience: Palantir and Crypto
One of the most important observations is what is not currently driving performance.
Two of our historically strongest contributors—Palantir Technologies and crypto—remain approximately 40–50% below their prior highs.
Despite this, the fund is approaching previous peak levels. This demonstrates that the portfolio is not reliant on a single theme. Instead, new drivers—primarily semiconductors and AI infrastructure—are carrying performance.
From a portfolio construction perspective, this is precisely the intended outcome.
On Palantir specifically: the stock has remained range-bound, driven largely by valuation concerns and high-profile short positions from investors such as Michael Burry.
Our view differs. In an increasingly geopolitical, AI-driven environment, Palantir’s strategic positioning remains strong. Operational performance continues to improve, even as the stock has not yet reflected that progress.
In effect, the company has strengthened while its valuation multiple has compressed—creating a potentially favorable setup.
Crypto follows a similar pattern. The sector experienced a 40–50% drawdown, driven by volatility and macro conditions. While it has recovered from its February lows, it remains well below prior peaks.
The implication is clear:
If these previously dominant drivers begin to perform alongside current leaders, the portfolio does not just reach new highs—it accelerates through them.
Closing Perspective
We are now approaching prior peak performance levels with an entirely new set of drivers.
This reflects:
Disciplined exits from underperforming areas
Effective capital rotation into higher-conviction opportunities
Willingness to embrace volatility where asymmetry exists
The portfolio today is structurally stronger than it was six months ago.
And importantly, multiple sources of upside remain underappreciated and under-realized.
That is exactly where we want to be.
Sincerely,
Pranjit K. Kalita
Chief Investment Officer