Laughing Water Capital, an investment management firm, has issued its investor letter for the fourth quarter of 2025. The fund returned approximately 6.8% during the quarter, bringing its net annual returns to about 3.9% after fees and expenses. Over the same period, the SP500TR and R2000 indexes posted returns of roughly 2.7% and 2.2%, respectively. For the full year, those indexes gained 17.9% and 12.8%.
While the fund outperformed these benchmarks last year, it has trailed them in the current year. The letter notes that long-term cumulative returns are more significant, as volatility diminishes over time. Since its inception, the portfolio has returned around 400%, compared to approximately 332% for the SP500TR and about 175% for the R2000.
The letter highlighted PAR Technology Corporation (NYSE:PAR), a provider of cloud-based hardware and software to the restaurant and retail sectors. On January 14, 2026, PAR's stock closed at $39.77 per share. It gained 5.46% over the past month but declined 48.17% over the last 52 weeks. The company's market capitalization stands at $1.573 billion.
In the letter, Laughing Water Capital stated: "PAR Technology Corporation (NYSE:PAR) – PAR is our restaurant software company, and was a meaningful detractor on our performance, as shares were down ~50% on the year. There was some normal fluctuation in the business due to customers’ implementation timelines that did not go our way, but PAR’s biggest problem seems to be that they are a software company in a world that believes AI and 'vibe coding' will destroy legacy software. This belief caused multiples to come down dramatically across the sector. The other mortal sin committed by PAR was choosing to think long term about their business in a market that seems to only care about 'hitting the numbers'. In brief, management elected to delay some expected revenue so that they could divert resources toward winning new business from a tier 1 operator."
According to database records, 24 hedge fund portfolios held PAR Technology at the end of the third quarter, down from 28 in the prior quarter. The company reported third-quarter revenue of $119 million, an increase of nearly 23%.