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Pricey Funding Companions,
The target of Jackson Peak Capital’s concentrated, lengthy/quick fairness technique is to ship enticing absolute returns throughout market environments. We’re striving to attain equity-like returns whereas sustaining low correlation to total fairness markets and taking much less outright market threat. By design, our low correlation (0.15 every day / -0.11 month-to-month correlation to ACWI since inception1) means our month-to-month and quarterly efficiency doesn’t monitor benchmarks.
Throughout Q1 2026, Jackson Peak returned -21.0%, internet.2 Q1 was a difficult quarter for the technique, with underperformance pushed by 1) elevating tech (and internet) publicity from prior low This autumn’25 ranges, based mostly on fast progress by the AI labs in early 2026, simply previous to the Iran battle triggering a broad pullback, and a couple of) on the event-driven aspect, a few positions moved in opposition to us and others didn’t see their catalysts materialize throughout the quarter. The All-Nation World Index (ACWI) returned -2.2% in Q1. The HFRX Fairness Hedge Index, a benchmark measure for Lengthy/Quick fairness hedge fund technique efficiency, returned -1.5%.
Q2 is off to a stronger begin so far as our bullish view on AI acceleration is materializing alongside geopolitical tensions easing and event-driven positions starting to maneuver in our favor.
Market Replace
The Iran battle dominated the tape in Q1. The preliminary escalation drove a pointy pullback in equities, an oil worth spike, and a reset in investor positioning throughout the market. From there, the market spent the again half of the quarter digesting the upper vitality costs, the implications for inflation and progress, and the trail of the battle. The online of it: increased vitality costs weigh on inflation and progress, however the accompanying volatility pressured a positioning reset that, in our view, had been an element available in the market’s lack of ability to make new highs for the reason that October/November 2025 Nasdaq surge.
On the similar time, AI progress has accelerated meaningfully over the past three to 6 months – with arguably a very powerful inflection in LLM functionality since ChatGPT launched in late 2022. Frontier mannequin capabilities, exemplified by Anthropic’s Claude, have improved dramatically. The leaps in mannequin functionality with Claude Code, Cowork, and different performance are doing for AI what Home windows did for private computing – increasing the floor space to non-coders whereas making energy customers extra productive, driving a parabolic surge in token utilization. Amidst this backdrop, the demand for compute and energy throughout the AI infrastructure worth chain stays structurally in need of provide. Whereas the macro backdrop has gotten noisier, the second-derivative results of this AI capex cycle are nonetheless displaying up within the fundamentals of the underlying corporations.
If the Iran battle may be resolved and oil / rates of interest normalize, the mix of much less lopsided market positioning and an accelerating AI cycle units up constructively. Our framework for internet publicity administration stays intact – AI progress, fiscal assist, and financial coverage – however AI is at the moment carrying a bigger share of the load because the rate-cut path has shifted to impartial/internet hawkish on the energy-driven inflation image.
Portfolio Positioning
At Q1’s finish, the portfolio’s internet publicity was 36%, up from 25% on the finish of This autumn. The portfolio is positioned for continued power within the AI infrastructure theme and the names beneath it (vitality, compute, and the “labor” aspect of the information heart buildout), in addition to a number of event-driven positions. Core Scientific (CORZ) was our largest place, a basic lengthy. EchoStar (SATS) stays a high holding and our most vital event-driven place, heading into the SpaceX IPO.
Throughout Q1, we sized publicity again as much as the AI infrastructure theme on the view that the YTD acceleration by the AI labs (Anthropic and OpenAI) would drive much more capex spending to allow the labs to satisfy utilization demand. The frontier labs have been put ready the place they are going to be “quick compute” if they don’t develop capability shortly all through the rest of the yr, particularly for Anthropic, which grew annual recurring income (ARR) from ~$9 billion on the finish of 2025 to $19 billion by March 2026 and $30 billion in April. This extraordinary top-line progress has been pushed by an acceleration in mannequin capabilities, increasing the use circumstances for energy customers and attracting new customers.
A place value highlighting this quarter is Core Scientific (CORZ). We re-engaged with CORZ throughout Q1 after exiting in This autumn, because the inventory retraced to enticing ranges simply as we had been trying so as to add to the AI infrastructure theme on the developments above. Particularly, CORZ is a beneficiary of the compute scarcity because it has priceless information heart co-location capability, which is structurally in need of provide heading into the rest of 2026 because the main AI labs and hyperscalers all search for energy and shovel-ready websites.
CORZ is among the few public corporations with shovel-ready capability at scale. It’s a high-performance computing (HPC) colocation supplier that pivoted from crypto mining to AI infrastructure, and the inspiration of the enterprise at the moment is its ~590 MW contract with CoreWeave below 12-year internet hosting agreements, representing over $10 billion in whole contracted income. Past the CoreWeave contract, CORZ has roughly 1.5 GW of whole leasable energy within the pipeline. Administration has acknowledged that they’re in energetic dialogue with a number of events and that colocation leasing agreements are anticipated within the close to future.
Administration is incentivized to diversify away from the only CoreWeave contract after the CoreWeave acquisition fell aside, and the entry valuation in Q1 was not pricing in any extra contracts. The catalyst path is a number of new colocation prospects introduced over the rest of 2026, every of which ought to drive a re-rating as income grows and focus threat declines. The first dangers are execution, the tempo of latest buyer signings, and the broader AI spending cycle.
Efficiency Attribution
The most important drivers of efficiency (contributors and detractors) throughout Q1 2026 are famous within the desk beneath.3
Our largest contributor in Q1 was Consolation Programs (FIX) as a basic lengthy. FIX has been one in all our most popular expressions of the labor aspect of the AI capex commerce – the mechanical, electrical, and HVAC contractors constructing out the information facilities. The thesis continued to play out throughout the quarter as the corporate reported sturdy outcomes, raised steering, and benefitted from continued visibility into the AI infrastructure buildout.
Zoom (ZM) was a contributor as an event-driven commerce. We initiated the place to seize a re-rating pushed by ZM’s stake in Anthropic and the numerous ramp in Anthropic’s ARR and valuation throughout the quarter. The place had enticing draw back safety given ZM’s execution, valuation, and the low cost the market was making use of to the Anthropic stake.
Salesforce (CRM) was a contributor as a brief. We initiated the quick on the again of Anthropic’s developments and product releases throughout the quarter, which we view as accelerating the aggressive stress on the incumbent enterprise software program stack.
EchoStar (SATS) was a detractor as an event-driven place regardless of our continued conviction within the underlying thesis. The place was damage by buying and selling exercise across the underlying and an current choice place that didn’t play out throughout the quarter. We proceed to carry a big place in SATS heading into the anticipated SpaceX IPO in Q2 given the big low cost to NAV.
BlackLine (BL) was a detractor as an event-driven place. We had constructed a place with the view BL would emerge as a lovely acquisition candidate given activist stress and historic PE/strategic curiosity. The place was initiated previous to the broader software program selloff, which de-rated all the sector.
Siemens Vitality (ENR)(SMEGF) was a detractor as a protracted. The basics stay in sturdy form – ENR continues to profit from the secular improve in vitality demand for AI information facilities and European fiscal stimulus for grid and vitality infrastructure – however we up-sized the place shortly earlier than the geopolitical-driven selloff.
Closing
Q2 is off to a robust begin because the AI acceleration has been acknowledged by the market and geopolitical tensions have eased on the margin. The mixture of serious sector cross-currents and rising capital markets exercise continues to create a wealthy alternative set for each the basic and event-driven sides of Jackson Peak’s technique.
In March, simply after Jackson Peak’s three-year anniversary, I had the pleasure of talking with Jon Kingston at Capital Employed. The dialog coated Jackson Peak’s technique, our funding course of, and portfolio positioning.
Thanks in your belief and the chance to handle a portion of your property. Please contact me when you’ve got any questions concerning the portfolio, to debate including to your funding, or if you recognize a professional investor who could also be match for Jackson Peak’s method.
Sincerely,
Patrick O’Brien
patrick.obrien@jacksonpeakcapital.com
About Jackson Peak Capital
Jackson Peak is another funding agency that manages a world, concentrated lengthy/quick fairness technique with versatile internet publicity. The target of Jackson Peak Capital’s technique is to ship enticing absolute returns throughout market environments. We’re striving to attain equity-like returns whereas sustaining low correlation to total fairness markets and taking much less outright market threat. Jackson Peak follows a research-driven, value-oriented method centered on uncovering uneven threat/reward alternatives.
Appendix 1. Glossary of phrases
Definitions
Lengthy Publicity: market worth of lengthy positions / whole portfolio worth
Quick Publicity: market worth of quick positions / whole portfolio worth
Web Publicity: Lengthy Publicity – Quick Publicity
Gross Publicity: Lengthy Publicity + Quick Publicity
Disclaimer:
The data introduced is for dialogue and academic functions solely and isn’t meant to make a suggestion or solicitation for the sale or buy of any particular securities, investments, or funding methods. Investments contain threat and, until in any other case acknowledged, aren’t assured. You should definitely first seek the advice of with a professional monetary adviser and/or tax skilled earlier than implementing any technique mentioned herein.
Whereas Jackson Peak Capital (“Jackson Peak”) believes all data herein is from dependable sources, no illustration or guarantee may be made with respect to its completeness or accuracy. Any projections, market outlooks, or estimates in these supplies are forward-looking statements and are based mostly upon inside evaluation and sure assumptions, which mirror the views of Jackson Peak and shouldn’t be construed to be indicative of precise occasions that can happen. As such, the knowledge might change sooner or later ought to any of the financial or market circumstances Jackson Peak used to base its assumptions change.
The outline of funding methods in these supplies is meant to be a abstract and shouldn’t be thought of an exhaustive and full description of the potential funding methods utilized by Jackson Peak mentioned herein. Different funding methods could also be added or subtracted from Jackson Peak in accordance with associated Funding Advisory Contracts by Jackson Peak in its sole and absolute discretion.
Any particular safety or funding examples in these supplies are supposed to function examples of Jackson Peak’s funding course of solely. There isn’t any assurance that Jackson Peak will make any investments with the identical or related traits as any investments introduced. Jackson Peak might purchase, promote, promote quick, cowl, change the type of its funding, or utterly exit from its funding in its portfolio holdings at any time for any or no cause. Jackson Peak hereby disclaims any obligation to offer updates or adjustments to the analyses contained herein together with, with out limitation, the style or sort of any Jackson Peak funding. The investments are introduced for dialogue functions solely. The reader shouldn’t assume that any investments recognized had been or might be worthwhile or that any funding suggestions or funding selections we make sooner or later might be worthwhile.
Any index or benchmark comparisons herein are offered for informational functions solely and shouldn’t be used as the idea for investing determination. You shouldn’t depend on these supplies as the idea upon which to make an funding determination. There may be no assurance that funding targets might be achieved. Shoppers should be ready to bear the chance of a lack of their funding.
Previous efficiency is just not indicative of future outcomes. Efficiency metrics herein reference these below Jackson Peak’s commonplace price association and symbolize these managed in keeping with Jackson Peak’s lengthy/quick technique for these above the agency’s account minimal dimension. Outcomes might fluctuate for shoppers relying on timing and different elements, and all shoppers ought to confer with their very own statements. All efficiency figures are unaudited and are topic to vary. Supply information for Jackson Peak Capital Returns and the MSCI ACWI is Interactive Brokers. Supply information for the HFRX Fairness Hedge Index is the index revealed by HFR on its web site.
1 Supply: Interactive Brokers, correlation figures from inception by way of 3/31/2026
2 Jackson Peak Capital returns referenced in these supplies are internet of all charges (administration and efficiency) and bills until in any other case famous; returns aren’t annualized. Shoppers ought to all the time verify their particular person statements for returns, which can fluctuate on account of time of onboarding and different elements.
3 Contributors/detractors famous might make the most of a mix of frequent inventory and choices.
Editor’s Observe: The abstract bullets for this text had been chosen by In search of Alpha editors.
