Ace River Capital Returns 6.25% in First Half, Concentrates Into Two Holdings

Ace River Capital Partners returned 6.25% in the first six months of 2026, lagging the S&P 500's 9.55% and the Russell 2000's 22.57%.

Manager Nick wrote in his mid-year letter that he does not manage the portfolio to outperform over any particular quarter or year. His objective is compounding capital over long periods by owning a small number of exceptional businesses bought at meaningful discounts to intrinsic value.

The portfolio became even more concentrated after the fund sold its entire MarineMax position. Vox Royalty and RCI Hospitality now make up the bulk of holdings. Nick said concentration is the natural result of conviction rather than a target in itself.

Vox Royalty is now the fund's largest holding and Nick's personal largest investment. The royalty model gives exposure to high-quality mining assets without the operating or capital requirements of mine ownership. Management has expanded the royalty portfolio while keeping a conservative balance sheet. Nick said the opportunity to repurchase shares at current prices offers an attractive avenue for per-share value creation. His conviction has increased materially this year. He views Vox as one of the most attractive long-term compounders in public markets.

RCI Hospitality remains a major position. Nick said the market is focused on the New York litigation overhang while overlooking the company's normalized free cash flow, owned real estate, and long record of disciplined capital allocation. He believes the current valuation materially understates intrinsic value even under conservative assumptions. Continued share repurchases and intelligent capital allocation should enhance per-share value. Eventual resolution of the New York matter could remove a meaningful overhang.

The MarineMax exit was driven by opportunity cost. Nick said he still respects management and believes the company owns attractive marina and waterfront assets. He concluded that capital could earn higher long-term returns in Vox and RCI Hospitality. The sale was not a reflection of deterioration in MarineMax's business.

Nick emphasized the same approach he has used since inception. The fund avoids software, finance, and insurance businesses. It focuses on asset-backed businesses with scarcity value. He typically holds fewer than five positions and adds only when the risk-reward profile is clearly asymmetric. Extended periods of inactivity and occasional sharp drawdowns are features of the strategy, not flaws.

For those following the two main holdings, the commodities analysis page tracks the underlying commodity price moves that drive Vox Royalty's revenue. RCI Hospitality's real estate exposure connects to broader trends in gold profile through its owned properties, though the business itself is not a gold play.

"As long as the gap between price and value remains attractive, I expect to stay patient, concentrated, and disciplined in allocating capital," Nick wrote.