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Arnott Capital’s Opportunities Strategy returned 11.22% net for 2025, averaging a monthly net exposure of 32% with a total average gross exposure of 129%. The biggest winners for Arnott during 2025 were data companies, followed by aerospace.

“Data is the new oil”

In their Q4 2025 letter to investors, which was obtained by Hedge Fund Alpha, Arnott’s Kenny Arnott and Yianni Gertos said the data theme added 654 basis points to the fund’s full-year return, led by Softbank. They added that Softbank “typifies” how they invest within the theme.

When they first invested in Softbank, it was trading at a 60% discount to net asset value, including very limited appreciation related to its ownership stake in OpenAI, the fastest-growing app in history at the time. As the year went on, investors started to see Softbank as one of the only ways to have a share in OpenAI within publicly traded stocks. As a result, Softbank stock jumped to a premium to its net asset value in H2 2025.

“While artificial intelligence (AI) is a well-owned and frequently discussed investment theme, we continue to find opportunities to gain exposure in under-owned, misunderstood equities that are likely to benefit from AI that the market has yet to appreciate,” Arnott and Gertos wrote.

Aerospace positions

Arnott’s holdings in the aerospace sector added 373 basis points to the firm’s 2025 return. Imbalances within the commercial aviation sector drove robust returns in the space. Arnott and Gertos said jet demand has surpassed Boeing’s and Airbus’ ability to supply, which is boosting the manufacturers’ air leasing companies and carriers by providing them with attractive market routes capable of holding premium pricing.

During late 2025, when carriers fell out of favori, the Arnott team boosted their aerospace exposure again after locking in gains earlier in the year. They exited aircraft leasing, leaving carriers as the largest exposure within the aerospace theme going into the end of the year.

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