Global Equities

Dear Investor,

We provide this monthly report to you following conclusion of the month of May 2026.

May reversed much of April’s fear trade for broader market. As a fragile US-Iran ceasefire took hold and the prospect of reopening the Strait of Hormuz improved, the risk premium that had built through the spring drained out of energy markets, with Brent falling close to 19% over the month to around $92.56, its worst month since the pandemic. Equities broadly rallied as investors moved back up the risk curve comparably infrastructure performed poorly and against that backdrop the strategy underperformed its benchmark by roughly 2%.

The largest single detractor was AECOM, and the irony is that the result itself looked strong. Reported on the 11th, it delivered a record second quarter, backlog at an all-time high of $26.2 billion, margins at new highs and a second consecutive lift to full-year guidance, with adjusted EPS now guided to $5.90 to $6.10. The market looked past the headline to the cash story. Operating cash flow was barely positive, free cash flow turned negative at around $27 million, and net debt climbed to $1.71 billion from under a billion a year earlier, with management flagging delayed payments in its Middle East operations. Healthcare was the weakest sector, extending a run of pressure across the managed-care complex where Medicaid cost trends and reimbursement headwinds have continued to erode earnings visibility, an exposure that sits outside the regulated and contracted infrastructure anchoring the strategy and offered little protection in a month when capital rotated firmly toward cyclical recovery.

On the other side of the ledger Dominion Energy was the standout following a takeover bid from NextEra. Acquisition whilst unexpected was not surprising as Dominion had to date failed to capitalise on the substantial advantages it had in the current environment. CK Hutchison was the other meaningful contributor, the deep-value Hong Kong conglomerate continuing to benefit from momentum in its ports and telecom divisions and from the optionality around unlocking value from its global ports portfolio. As the Gulf risk premium faded and regional sentiment improved, a name geared to global trade and trading well below most estimates of intrinsic worth was a natural beneficiary.

Underneath the relative number the thesis is intact. The month’s pain was concentrated in a stock-specific cash-flow wobble at a high-quality compounder and in a defensive sleeve that was always going to lag a sharp risk-on rally, rather than in any deterioration of the underlying cash flows at the heart of the book. With crude settling back toward pre-conflict levels and the truce holding for now, the read-through for the portfolio’s airport, transport and utility holdings is constructive: lower input costs, recovering traffic and an inflation-linked revenue base that does not depend on the direction of the oil price.