CGL

Castelnau Group Limited

Financial Services First-pass screen £300m

380/1000 Overall fit

AI beneficiary 35% 35

Operating leverage 25% 40

Valuation 25% 35

Downside protection 15% 45

First-pass take

Castelnau is a concentrated UK investment fund (49% in top 2 holdings) exposed primarily to consumer discretionary: funeral services (Dignity, down 32%), toys/hobbies (Hornby, down 28%), and retail. While Ocula Technologies holds promise with 'Actionable AI' IP, it represents <2% of assets and is pre-revenue at one year old. Portfolio underperformed benchmark by 1,290bps, driven by deteriorating fundamentals in legacy holdings, not valuation recovery.

Flags

concentratedloss-makingconsumer-discretionarycyclicalunderperformanceocula-early-stageconcentration-riskno-ai-strategy