L1 Capital, a prominent investment management entity, recently disseminated its second-quarter 2026 investor correspondence for its International Fund. This report characterizes the existing investment landscape as a 'two-speed' yet robust global economy, navigating an uncertain future. The discussion within the letter probes the speculative nature of an AI bubble, differentiating between solid underlying performance and transient market enthusiasm. Furthermore, the market exhibits a 'narrow' characteristic, marked by heightened optimism and pronounced pessimism. Against this economic backdrop, the Fund achieved a +2.6% return (net of fees) in the June 2026 quarter, a notable contrast to the benchmark's +12.5% return (in A$). The primary cause of this underperformance was attributed to specific investment omissions from the Fund's portfolio. The Fund's strategy continues to prioritize quality, rigorous valuation, and the safeguarding against permanent capital impairment, affirming its belief in the portfolio's capacity to deliver appealing risk-adjusted returns for patient investors. Additionally, the letter directs readers to the Fund's top five holdings, showcasing its premier selections for 2026.

According to L1 Capital International Fund's Q2 2026 investor letter, Intercontinental Exchange, Inc. (NYSE:ICE), a US-based financial services provider offering technology, data, and market infrastructure to a diverse clientele including financial institutions, corporations, and governmental entities, negatively affected the Fund's performance. As of July 17, 2026, Intercontinental Exchange, Inc. (NYSE:ICE) closed at $139.65 per share, commanding a market capitalization of $78.97 billion. Over the preceding month, Intercontinental Exchange, Inc. (NYSE:ICE) registered a 6.33% return, though its shares experienced a 22.76% decline over the past 52 weeks. L1 Capital International Fund conveyed its perspective on Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2 2026 investor update, asserting that Intercontinental Exchange, Inc. (NYSE:ICE) exemplifies a high-quality enterprise not significantly sensitive to AI trends, yet it appears to be trading at an attractive valuation, with a forward price-to-earnings ratio of approximately 17x, a level not observed since the Global Financial Crisis. The Fund has maintained a long-term position in ICE and has frequently analyzed this investment. From their viewpoint, the core investment thesis remains largely unchanged. Although there are market apprehensions regarding AI's potential impact on the utilization of ICE's proprietary data and analytics, L1 Capital deems this a minor concern, unlikely to materially affect ICE. A more substantial market concern revolves around the Commodity Futures Trading Commission (CFTC) potentially authorizing 'perpetual' derivatives and fostering competition in products like cryptocurrencies, which could challenge established regulated exchanges.

The CFTC's current situation is deemed highly atypical. Typically, the commission comprises five members, with no more than three from the same political affiliation. However, due to several resignations, only one commissioner, Michael Selig, appointed by President Trump, remains. Selig's background includes legal work for crypto exchanges and advocacy for innovation, which adds a unique dimension to the regulatory landscape. This analysis suggests that despite certain market headwinds and regulatory uncertainties, Intercontinental Exchange maintains a fundamentally sound business model and a favorable valuation, making it an appealing prospect for long-term investors focused on quality and value. The current market dynamics, characterized by a 'two-speed' economy and selective exuberance, underscore the importance of discerning investment strategies that prioritize intrinsic value over speculative trends. As the financial world evolves, companies like ICE, with robust infrastructure and a clear commitment to safeguarding capital, will continue to play a pivotal role in delivering sustainable returns and fostering market stability.