L1 Capital International Fund has published its investor letter for the fourth quarter of 2025. The fund reported a net return of 2.2% for the quarter, compared to a benchmark return of 2.5%. For the full year 2025, the fund returned 9.8% net of fees, while the benchmark index returned 12.4%.
The letter detailed the fund's positioning and portfolio adjustments. It emphasized that valuation analysis remains essential for potential investments focused on artificial intelligence, stating that conviction in AI alone is insufficient to guarantee successful outcomes.
Jacobs Solutions Inc. (NYSE:J) was specifically highlighted in the communication. On January 14, 2026, Jacobs stock closed at $139.00 per share. The stock showed a one-month return of 4.76% and had gained 1.52% over the preceding 52 weeks. Jacobs Solutions maintains a market capitalization of $16.506 billion.
In the letter, L1 Capital International Fund commented on Jacobs Solutions. "Jacobs Solutions Inc. is a global leader in engineering services," the fund stated. "The company continues to perform in line with our expectations."
The fund addressed concerns raised during the quarter when a competitor's investor event suggested AI could disrupt the engineering services industry. "We believe Jacobs Solutions and the engineering services it provides will be a net beneficiary," the letter explained. "Jacobs Solutions' management is already actively investing in AI."
L1 Capital discussed the issue with Jacobs Solutions management and also spoke to the competitor. The fund believes the competitor's CEO "materially mis-spoke" at their investor event and that the firm is now in damage control mode.
"We viewed the share price weakness as unjustified and moderately increased our position," the letter stated. After the quarter ended, Jacobs Solutions acquired the minority interests in subsidiary PA Consulting. The transaction had been well signaled and was strategically sound, according to the fund. The agreed acquisition price was modestly below expectations, representing a small positive to the base case valuation.
The fund's strategy focuses on investing in high-quality companies with favorable cashflow-based valuations. Global stock markets generally experienced a strong year in 2025.