Soumya Eswaran
3 min read
L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) third-quarter 2026 investor letter. A copy of the letter can be downloaded here. This Quarterly Report covers the unusually complex investment environment, AI’s opportunities and challenges, portfolio strategy, September 2026 performance, and recent adjustments. The Fund returned +3.5% net of fees in the September 2026 quarter, outperforming its benchmark’s 1.5% gain, despite a stronger Australian dollar. Energy, Information Technology and Communication Services performed well, while Utilities, Industrials and Real Estate lagged. The portfolio held 22 investments, with the ten largest representing about 63% of assets. The strategy emphasizes diversification across different earnings drivers rather than concentration in a single sector or theme, including AI. Amid geopolitical instability, higher interest rates, and rapid technological change, the Fund assesses multiple scenarios while maintaining exposure to high-quality companies and managing valuation risk. It views AI as both an opportunity and a source of uncertainty, focusing ultimately on businesses with durable competitive advantages, earnings, and cash generation. Additionally, reviewing the Strategy’s top five holdings provides insight into its best positions for 2026.
In its Q3 2026 investor letter, L1 Capital International Fund highlighted CRH plc (NYSE:CRH). CRH plc (NYSE:CRH) is a Dublin-based building solutions provider. On October 20, 2026, CRH plc (NYSE:CRH) closed at $98.59 per share, reflecting a market capitalization of $65.59 billion. CRH plc (NYSE:CRH) posted a one-month return of -7.17%, while its shares gained 0.65% over the past 52 weeks.
L1 Capital International Fund stated the following regarding CRH plc (NYSE:CRH) in its Q3 2026 investor letter:
“CRH plc (NYSE:CRH) was the only company to detract by more than 0.5 percentage points. Warren Buffett famously advised investors to “only buy something that you’d be perfectly happy to hold if the market shut down for 10 years”. In today’s rapidly changing world, and particularly during a genuine technological revolution, we are not sure this advice can be applied literally to any business. It certainly does not apply to Nvidia, or most AI-sensitive businesses.
However, if there is a business to which it might apply, it is CRH. We have followed CRH and the building materials industry closely for more than 25 years. We provided a detailed overview of CRH in 2021, and the business has been a strong contributor to Fund returns over the longer term. CRH’s share price has fallen approximately 35% from its early 2026 peak, including more than 20% during the September quarter. What has gone wrong? Much depends on your investment horizon. We consider CRH’s competitive position, management and longer-term earnings power to be fundamentally unchanged. In a time when some investors are looking to the stars, we are comfortable keeping our feet firmly terrestrial…” (Click here to read the full text)
