Atherean Value Fund Q1 2026 Commentary

Atherean Value Fund’s commentary for the first quarter ended March 31, 2026.

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Dear Atherean Value Fund Limited Partners:

The Atherean Value Fund, LP (“Fund”) was down 5.4% in the first quarter of 2026. Please refer to your statements from the Fund administrator for the exact performance of your account as returns may vary by timing and fee structure. Subsequent to quarter end, the Fund has recovered all of its first quarter losses and returns are slightly positive year-to-date as of the writing of this letter. As of today the gross exposure of the Fund is 124% of equity and the net exposure, not including options, is 112%. Currently the core value-oriented long portfolio comprises 75% of Fund gross exposure, risk-arbitrage and special situations comprise 14%, trend-following strategies comprise 9%, and discretionary shorts comprise the remainder of gross exposure.

The first quarter of 2026 was a difficult one for the Fund as global equity markets experienced significant volatility driven by spiking oil prices and the continued unwinding of the speculative excess which we have written about extensively in prior letters. Amidst the broad market volatility our core long portfolio experienced losses as indiscriminate selling pressure affected many small- and micro-cap securities including those in which we invest. While we are disappointed with the Fund’s performance in the quarter, we believe that the substantial valuation gap between speculative growth stocks and profitable, cash flowing businesses remains intact. As we discussed in our last letter, heading into the year our core long portfolio had a free cash flow yield of over ten percent while U.S. equity market indices had such yields in the low single digits. Dislocations of this magnitude have historically resolved themselves in favor of the patient, disciplined investor, and we believe that the current environment is no exception.

We do not manage the Fund against a benchmark and do not consider comparisons to traditional market indices to be meaningful. The composition of our core long portfolio illustrates this: our concentrated portfolio of twenty-two long positions spans a wide range of market capitalizations, from nano-cap companies listed in the U.S. and Canada with market caps under $50M to large-cap companies exceeding $30B. Such portfolio construction is the outcome of a purely bottom-up process in which we go where we believe the most attractive valuations exist, regardless of company market cap. One of the advantages related to our small size is that we are able to fish in ponds, specifically small and microcap securities, that larger managers are unable to due to size and liquidity constraints. In addition to the core long portfolio we are simultaneously running risk-arbitrage and trend-following overlays as well as a small short book. Given this portfolio architecture no standard index comes close to replicating the Fund’s positioning, therefore comparisons to any single benchmark would be misleading in one direction or another. The measure which we focus on is whether we have preserved and grown the absolute value of our partners’ capital at an attractive rate over the long term.