Sycamore Portfolio Update | July 2026
Domain expertise in software, Situational Awareness, current holdings, transactions, and company specific commentary
Sycamore is for informational purposes only. Read my full disclosure here.
Monthly Commentary
Domain Expertise
In July, we saw glimpses of what the sell AI infrastructure, buy software rotation could one day look like.
When it comes to owning software businesses during this time, the primary thing to look for is domain expertise. Which software companies out there know their corner of the market far better than anyone else? I believe the software portion of my portfolio, which is badly hurting my returns right now, will one day be big AI winners, and thus, portfolio winners. At this point, it’s a matter of enduring more than anything else.
Thoma Bravo is the largest private equity firm focused on the software sector. And if you’ve been listening to what Orlando Bravo has been saying, it has been on this. The firm is hunting for businesses whose stocks are deeply out of favor because of indiscriminate selling, while the business itself is as strong as ever. Bravo believes there are jewels in the public markets right now because they have decades of domain expertise built into their products and services.
He defines domain expertise as the following:
the number one player in its category
a management team with real domain depth
visible momentum using AI to accelerate growth rather than get disrupted by it
Despite the short term pain I’m feeling right now, I have continued to position my portfolio for this outcome. More commentary on this below.
Situational Awareness
I have been fascinated by the commentary regarding Leopold Aschenbrenner across Substack as the month came to a close. Everyone is dunking on the guy for blowing up his fund that he grew from a few hundred million in AUM just two years ago to a peak of $45B according to some reports.
Here are my two takeaways:
He hasn’t completely blown up his fund (or at least not yet). He started the year with ~$4B in AUM and according to the WSJ, he is still posting a gain YTD of >80%. That’s massive! He has completely de-levered and is now running a $7B investment fund. Obviously $45B is better than $7B, but my point is he still has a very meaningful fund to manage.
I have seen several hot takes on this topic that have placed the blame on a lack of diversification. I couldn’t disagree more. This has nothing to do with concentration/diversification and everything to do with leverage. Leopold was running 4 turns of leverage. Terrifying! Go read about Long-Term Capital Management and other actual blow ups and they are all the same. Always leverage. Never concentration.
That said, I am not condoning his careless investing style. I certainly don’t invest that way, nor would I ever give him money to manage. However, I’m not going to dunk on him. Given his performance + the size of his fund, he has probably made ~$1B in management and performance fees (using the 2/20 model) in just two years.
Meanwhile, I’ve got a Substack over here with 39 paying subscribers and $4K of ARR (not to pat myself on the back!).
Speaking of that…
Sycamore on Substack
July was my busiest month yet, with five reports published. If you missed any of them, you can check them out here:
My personal goal for the year is to get Sycamore a little orange Substack bestseller badge. For that, I continue working and have a ways to go. That said, I thought it’d be fun to make a progress bar out of it.
As always, I encourage you to upgrade to paid, not because of a single idea or success or momentum trade, but for long-term compounding. I have always said the north star of Sycamore is the multi-year CAGR and it remains so. Below is a chart of the growth of $10,000 based on Sycamore’s return profile comped to the S&P 500 since the start of 2020.
This year has been a challenging one, but the long-term trend is intact. And our best days are still ahead.
Thanks for reading, and for paid subscribers, the rest of this report contains the following:
Current holdings (including new position weights and cost basis)
Transactions in July
Company specific commentary