The best way to learn about our strategy is to sign up for our weekly emails.

Lembas Capital invests with conviction in high-quality companies that are temporarily stranded in undercapitalized parts of the public and private markets.

We look for companies that are likely to win significant market share over the long term and that are managed by people who are aligned to succeed alongside us. We ask three main questions of our companies:

1) Does it have huge capacity to reinvest?
2) Does it have excellent long-run unit economics?
3) Is it underpriced relative to its bright future?

Relying on deep primary diligence at the product level, we seek high-quality investments at compelling prices. Once we find them, we take a patient and diligent approach to portfolio management in order to participate in the long term upside as capital flows move in our favor.

Seeing Through the Current Field

We believe the largest competitive advantage accrues to those who see through the current system to arbitrage others’ constraints. This is the common thread that runs through Billy Beane’s World-Series-winning Moneyball approach, the rise of competitive video gamers as top startup founders, and, of course, Buffett’s structural advantages at Berkshire Hathaway. We explicitly map the metagame, diligencing other investors and management equity grants with the same care with which we diligence a product. We also focus on undercapitalized parts of the market that attract less competition from other investors.

What’s in a Name?

Lembas fits with our theme of seeing through the system. Lembas is the bread that sustains the adventurers in Tolkien’s Lord of the Rings. It is made by a secret craft that the travelers could have learned, had they only the time to stop and study the process. At another level, Tolkien wrote the trilogy as a hidden Catholic allegory, and lembas directly translates to bread of life in his invented language. We are always seeking to better understand the key underlying processes that lead to extraordinary and unexpected outcomes. In doing so, we’re looking for the huge intellectual arbitrages that come from changing a perspective and its implicit assumptions.

Start a Conversation

We love nothing more than talking about investing, so please email Luke at luk[email protected] if you’d like to start a conversation. We’re always eager to learn more about how other investors approach the markets.