One of My Most Underrated Tools for Investment Idea Generation: Fund Letters

When it comes to generating investment ideas, one of my absolute favorite and often overlooked resources is reading letters from investment funds. Known by various names—like “letters to LPs (limited partners),” “fund letters,” “shareholder letters,” “hedge fund letters,” or simply “letters to investors”—these documents offer unique insights straight from the minds of seasoned fund managers.

Fund letters provide a window into the strategies and thought processes of successful investors—as well as unsuccessful investors; more on this further down below.

While the content of such letters can vary widely, a common theme is the sharing of high-conviction investment ideas and updates on existing holdings.

Many of these letters are freely accessible to the public, and occasionally, confidential letters make their way into the open too, adding a layer of intrigue and exclusive insight.

Why Fund Letters Are a Gold Mine for Investors

What makes fund letters so valuable is that they often include a distilled investment pitch focused on just a few key metrics that drive a thesis.