Photon Research

A photon is the smallest unit of light and all other forms of electromagnetic radiation. In quantum mechanics, photons exhibit wave-particle duality, a property observed through double-slit experiment, where photons behave both as particles and as waves. Nature says that quantum objects are neither classical particles nor classical waves, which is fundamentally different from our everyday intuition.

We believe investing shares a similar duality. 

Long horizon investors seem to have low tolerance for ‘ambiguous’ equity strategies, to the extent that funds are categorized into either systematic or fundamental, quantitative or discretionary. Quantitative models provide discipline, consistency, and the ability to process information broader and faster (AI buzz word), while fundamental approaches provide judgment and human expertise, filling the discrepancy that machines can’t. 

Photon embraces the art of quantamental investing.

Investment Philosophy

The universe seems to contain a tension between equilibrium-seeking forces and runaway forces, with some systems driven by positive feedback loops where deviations amplify themselves, and some systems driven by negative feedback loops where deviations were pushed toward equilibrium. In cosmology, the universe has been expanding for billions of years without reverting to a previous state, at least, as long as humans can observe.

But what if we identify a ‘runaway’ only because we observe a limited segment of its trajectory or history. Given a sufficiently long time horizon, what appears to be an increasing divergence may actually be a part of a much larger equilibrium process.

Conversely, what if what appears to be mean reversion may actually be a part of a much larger runaway process.

In other words, the limitation of observation doesn’t specifically favour classification of equilibrium or runaway. Runaway phenomenon may be an incomplete observation of a larger equilibrium, equilibrium phenomenon may be an incomplete observation of a larger runaway.

Photon Capital was established with a single objective: to provide long term capital appreciation through a concentrated quantamental strategy.

We believe that markets, much like our universe, are ultimately governed by equilibrium and runaway forces. Investor behavior, structural constraints, and shifting narratives can create significant dislocations.

While the dislocations between price and intrinsic value, or equally important, the absence of such dislocations, can persist for extended periods of time, long investment horizons increase the probability that the sub-system matures and the value extracted is ultimately recognised.

Our investment process combines systematic quantitative analysis with bottom-up fundamental research. 

Quantitatively, we aim to capture a combination of value and momentum factors, factors that we view as manifestations of equilibrium and runaway forces. Meanwhile, the fundamental approach remains a core component of our process.

Portfolio Construction

Photon Capital manages a concentrated portfolio of approximately 30 to 40 holdings.

Position sizing is guided by a quantitative framework that establishes a disciplined baseline allocation, while allowing for discretionary adjustments based on conviction and fundamental assessment. Individual positions are limited to 15%, with current exposures remaining below that threshold.

We believe concentration is an important driver of excess returns. ‘Put all your eggs in one basket and watch the basket very carefully’.

Risk Management

Portfolio-level risk is managed through top-down asset allocation, which serves two purposes: first, to tilt portfolio exposure toward markets where we observe attractive opportunities; and second, to manage overall portfolio volatility.

We employ no leverage and maintain a long-only investment approach. Portfolio turnover is generally low, reflecting our long-term investment horizon, though rebalancing decisions are made discretionarily as opportunities evolve.

Asset Allocation:

Performance