The Australian Financial Review featured our global equities fund in a recent article examining how hedge funds navigated the volatile software sector amid AI-driven disruption. As an Australian-based investment management firm, we adjusted our positioning significantly as market sentiment shifted dramatically in early 2026.
Initially, we identified opportunities in software stocks that appeared oversold due to what we believed were misplaced fears around AI disruption. However, as conditions evolved, we repositioned our portfolio in January, exiting long positions like Atlassian and establishing short positions across a basket of twelve software stocks, including Monday.com and Intuit. The correction proved more severe than anticipated, with some stocks plunging more than 40 per cent in February alone.
When the sell-off reached fever pitch late in the month, we viewed it as a sign of capitulation marking a short-term bottom, prompting us to cover our short positions. We explained our approach to clients:
"We still think software is facing genuine uncertainty as AI reshapes workflow, pricing power, and moats. But in a sector where sentiment can swing from euphoria to fatalism in weeks, helped by the odd AI Doomsday report, our job is to stay dynamic: cut risk when the set-up deteriorates, and lean back in when the market offers it back at meaningfully better prices."
To read the article, click the link below.