In the third quarter of 2025, Rowan Street Capital's fund experienced minimal change, achieving a +0.22% return and bringing its year-to-date net returns to an impressive +20.4% as of September 30, 2025. This performance significantly outpaced the S&P 500's +14.8% gain over the same period. Over the past three years, the fund has demonstrated remarkable growth, compounding capital at approximately +54.2% annually, resulting in a cumulative return of +266%. This exceptional growth is attributed to a steadfast commitment to a refined investment process, focusing on owning outstanding businesses led by visionary owner-operators who prioritize long-term value creation. The fund's current portfolio is described as its strongest and most focused to date, a testament to years of experience, continuous learning, and strategic reflection.
The core of Rowan Street Capital's strategy lies in identifying and investing in businesses with enduring competitive advantages and aligning with world-class leaders. This approach is evident in their long-term holdings, which include Meta Platforms, Shopify, Spotify, Topicus, and Netflix. Meta, for instance, has been their largest holding for several years, compounding at over 21% annually due to its operational excellence and sustained competitive edge. Shopify, a more recent addition, has seen 29% annual compounding, driven by product innovation and AI-powered tools. Netflix's resilience and growth, particularly after a market downturn in 2022, underscore the importance of patience and conviction in superior businesses. The fund also details its strategic reallocation from Spotify to Tesla, viewing Tesla as a truly exceptional company with a multi-layered moat that extends beyond traditional automotive manufacturing into data, AI, energy, and robotics. This move highlights their willingness to capitalize on market dislocations and invest boldly when sentiment is at its lowest, as demonstrated by previous successful investments in Meta, Shopify, Spotify, and Netflix during periods of widespread pessimism.
Looking ahead, Rowan Street Capital remains committed to its philosophy of focused, high-conviction investment partnerships designed for long-term capital compounding. Their success is rooted in temperament: patience when others are hasty, conviction when others are doubtful, and discipline when others are chasing trends. They seek partners who share this long-term mindset, valuing simplicity and believing in the quiet power of sustained ownership. The fund aims to continuously refine its approach, fostering deep alignment and trusted relationships to achieve exceptional long-term results. This enduring commitment to a principled investment strategy ensures that Rowan Street Capital continues to grow capital alongside its partners, emphasizing the profound impact of time, trust, and shared values in achieving financial success.