04/26: Building $HRMT. From a Fund to a Forever Home
Portfolio Update. Inside the launch of Phase 2, our new 'Constitution', and the Rags-to-Riches story behind our first wholly-owned subsidiary.
Want more context? Track the journey so far here.
Index
Briefing
Apparently, April is our month. This 23rd edition brings you a few critical updates on exactly what we’ve been up to.
First, a quick housekeeping note: please ensure our corporate email isn’t landing in your spam folder.
We’ve sent several follow-ups to everyone who expressed interest in participating as a shareholder in our new enterprise.
Our current email is alejandro@hermit.es.
Note that we will soon transition to hrmt.com addresses. We’ll be using those four letters, HRMT, as the ticker for our listed enterprise in the future… and as you know, we like to plan ahead.
Given our current liquidity levels, this monthly brief focuses on three areas:
Hermit Ventures: A breakdown of our current projects, including key milestones, the long-term vision, and concrete deals.
Portfolio Overview: A brief commentary on performance, plus a vital summary of incentives and valuation moving forward.
April Review: Insights from earnings and news regarding current and future holdings, details on our first deal, and the boots on the ground intel we’ve gathered in anticipation of next week’s China giga-summary.
We hope you find the insights valuable. Enjoy the read!
Please note that this update accurately reflects the portfolio changes within Equity Focus FIL, our regulated European hedge fund.
This publication is confidential and intended solely for the use of the person or entity to whom it is given or sent. It may not be reproduced, distributed, or transmitted without the author's prior written consent.
By accepting to receive the full post as a 🧙♂️ Inner Circle or Paid member, the recipient agrees to be bound by the foregoing limitations.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
🧙🏼♂️ Hermit Ventures Ltd.
Let’s start with the milestones.
I’ve been working on these for about a decade; so, even though they’re new to some of you, they are etched in stone for those who know me best.
It’s all a result of constant optimization and periodic reviews.
About five years ago, I set up a three-phase plan. Naively, I initially thought of it as a mini Berkshire Hathaway.
However, with time, I’ve realized there is only one Berkshire. What I’m creating is my own vision, and we should refer to it as what it is: Hermit Group ($HRMT).
The plan has three distinct phases:
Phase 1: Track Record
With the objective of setting up an independent, audited track record, the idea was to launch a fund.
This journey was a long road of learning. For about a decade before launching, I was balancing roles at a family office with a range of projects/jobs: project finance, logistics, bankruptcy procedures, real estate, bank credit negotiations, and IB M&A.
While time-consuming, these tasks provided the exact knowledge and contacts needed to make this vision a reality.
Everything aligned in 2023 and 2024 when a series of events freed up the necessary capital and time. We established Equity Focus FIL in 2024, aiming for a modest €10m cap. To keep costs low, we screened about 30 different structures before choosing the Fondo de Inversion Libre (structure).
This structure costs roughly €50k a year and offers a “fully authorized” status with an EU passport. Crucially, it doesn’t force us into rigid UCITS criteria, allowing us more freedom in what we buy and how much we can concentrate our positions.
However, we made a significant blunder: because it isn’t a separate legal entity, we lack final control. Despite that, this fund has served its purpose, as it acted as a transparent way to prove that our strategy works, even while remaining criminally underdeveloped.
Given our success, and (importanly) having learned from our past challenges, we are now moving into Phase 2.
Phase 2: Holding
Once we had a proven track record, we could move on to the real key to compounding: purchasing cash flows.
We are building an Active Holding Company designed to be a permanent home for businesses.
This removes the cycle of buying and selling just to generate fees, providing stability for business owners, shareholders, and management alike.
Given our specialization and size, we are starting by acquiring elderly and mental healthcare facilities.
For the technical readers: this is essentially a regional roll-up. Our goal is to capture profits from these companies and redeploy them through our various engines.
Initially, we will have two engines: Permanent Private Subsidiaries and Listed Marketable Securities. We’ll start with a 30/70 split in favor of marketable securities, moving toward a 50/50 balance over time.
Eventually, we will scale to 3–5 engines. I can currently disclose the first three:
Engine #1. Public Markets – Focused on listed securities.
Engine #2. Private Markets – Focused on high cash-flowing business roll-up and private acquisitions.
Engine #3. Venture Accelerator – Led by an elite sales professional. The strategy is to acquire 10-30% of a startup with ~€1m in revenue, accelerate them to €3m within 12 months, and then move to the next project. The holding company retains the minority stake for dividends, purchasing the remaining shares or exiting in the future, with minimal ongoing support required.
The Team & Growth
Two new directors and I currently manage engines 1 and 2.
These directors are working with us part-time until we consolidate our first three companies, at which point they will transition to full-time roles.
Engine 3 will kick off once we reach the £25–30m mark.
While I will provide final approval for initial deals, the goal is a decentralized entity in which each engine has its own head, budget, and timeline.
As we grow past the £50m mark, my role will transition from managing the public engine to internal capital reallocation, hiring, and high-level fundraising.
And yes, I know exactly who would do a fantastic job leading each engine.
Please note that all the professionals I’m discussing are, in my opinion, far better at their respective jobs than I am. They are S-tier talent who will only participate in a venture like this as owners.
That is exactly why my job is ultimately to create a system that incentivizes the right behavior.
For those looking to become shareholders, you will shortly receive our shareholders’ agreement, the ‘Constitution’ of the company, if you will.
It sets the rules straight in about 12 pages of very detailed instructions. This document (with any final amendments) will be approved by the board next Thursday, May 14th.
Phase 2 officially started in April 2026. We expect mostly organic growth for now with about 30-35 initial shareholder, though I am confident that once we close our first deal, significant interest will follow (I’m talking about people wanting to become shareholders once we 2x this beast with one deal) and we’ll have to say NO to people.
Phase 3: Listing
Finally, there is Phase 3. This step is straightforward but relies on our initial compounding. The goal is to reach at least £150m in value/assets before triggering this phase, which will be a total game-changer.
Once we achieve that scale, we plan to reverse merge into a listed company, effectively taking Hermit Ventures public under the ticker HRMT (fingers crossed).
This provides our shareholders with liquidity and, more importantly, creates a permanent structure for the company to perpetuate itself.
As a decentralized entity, my hope is that Hermit Group long outlives me.
While it may sound ambitious, this is truly my life’s work. HRMT is my legacy, and I am committed to fortifying its operations through proper incentives and a rock-solid shareholders’ agreement.
A Commitment to Shareholders
Once public, our agreement will strictly limit dilution to only three capital raises: the initial listing and two subsequent value-adding, clause-contingent rounds.
There will be no share compensation shenanigans. Instead, we will adopt a cash bonus system with mandatory share repurchases (25% of the bonus for employees and up to 75% for upper management) inspired by Constellation.
While this might be a slower path for management to build wealth, it is the perfect vehicle for shareholders, which is all that matters to me.
So… What Now?
Hermit Ventures Ltd. is officially opening its inaugural funding round in the second half of May, remaining open for approximately two months.
This round marks a significant milestone as we transition into our new operational structure, utilizing a UK-based bank and broker with all transactions denominated in GBP.
Uniquely for this specific round, there is no minimum capital requirement, though we suggest a baseline of £10,000 to align with the project’s scope.
Shareholders contributing £100,000 or more will receive a complimentary subscription to The Hermit, which will be the means of information distribtuition for it all.
All participants will be classified as B shareholders, granting an equal claim to company profits and assets alongside employee-held A shares (voting shares), with the long-term goal of consolidating both into a single class upon a future public listing.
Our investment philosophy centers on long-term compounding and protecting per-share cash flow.
Deal Pipeline and Growth Outlook
The strategy for this capital raise is backed by a pipeline of 3 major elderly care and mental health housing facilities with motivated sellers who want to retire.
Our immediate priority is the acquisition of businesses in Spain and the UK (initially) with a small but recurring revenue base and strong 20%+ EBIT margins.
By utilizing a mix of bank debt and vendor financing, Hermit Ventures only needs to cover 30–40% of the first deal's value in cash.
It is important to note that this financing happens at the individual company level; the Holding Company itself will carry effectively no debt, other than small credit facilities used to bridge administrative timing (e.g., matching receivables and payables).
We are also pursuing a de-risked back-to-back arbitrage play in distribution cap table consolidation and a 10% interest private debt deal with Aurora Spine that includes equity warrants for additional upside.
While 70% of our portfolio will remain in marketable, these private deals are expected to significantly boost our per-share value and become the baseline for growth via cashflow redeployment.
For these we will utilize a transparent valuation formula (Equity Value of consolidated subsidiaries = LTM FCF x 8) and anticipate that the combination of smart leverage and high-margin acquisitions will drive first-year returns for early participants that trend closer to triple digits than single digits.
Our goal is to close the initial acquisition before September, scaling through a niche consolidation play thereafter.
Onboarding and Compliance
The participation process is designed to be straightforward while remaining fully compliant with UK regulations.
We begin next week with personal vetting calls, so expect an email from me in the next few days if you’ve shown interest in the past.
Again, please keep an eye on your spam folder just in case (alejandro@hermit.es).
📊 Portfolio Overview
YTD Performance Summary
Equity Focus* [A Shares] ➤ +4.99%
Equity Focus* [Y Shares] ➤ +4.81%
All-Weather Portfolio** ➤ +4.49%
* Equity Focus FIL was approved in April 2025 and started operating in June 2025. Figures are net of fees.
** The All-Weather Portfolio, introduced in July 2025, serves as a BENCHMARK reference.
Equity Focus FIL
Net Asset Value (NAV) last updated: May 1st, 2026.
As we transition into Hermit Ventures Ltd., this will likely be our final report on Equity Focus FIL.
Below are the closing statistics.
Moving forward, we will use the S&P 500 and the risk-free rate as our benchmarks, as our strategy will now broaden and therefore will be close to our All-Weather Portfolio.