Disclosure
The opinions expressed above are solely those of Michel Invests and do not constitute investment advice, a recommendation, or an offer to sell or a solicitation of an offer to buy any securities. These views are as of the date of publication and are subject to change without notice.
“Michel Invests,” “we,” “us,” and “our” refer to the investment philosophy and strategy developed by Michel Ingenbleek. Our approach combines macroeconomic analysis, industry-level insights, and a disciplined focus on intrinsic value investing.
Michel Invests is not a registered investment advisor, and the content shared here is for educational purposes only. Readers should conduct their own research or consult a financial advisor before making any investment decisions. Michel Invests does not currently manage third-party funds or accept investments from external parties.” so you can leave the disclosure on teh tab/page annual letters, but the disclosures in the letters for 2022 and 2023 need to be removed and just replace the bottom disclosure of each letter with the one I have given in this text. Please make sure you remove “social capital performance” above the table in each letter.
| Fund Name | Paid-In Index (1/1/22) | Indexed Value (12/31/22) | Contributions (Indexed) | Gross Portfolio Multiple | Net TVPI | Gross IRR | Net IRR to LPs |
| Fund-I (2022) | 100 | 661.3 | 0 | 6.6 | 6.6 | 561.3% | 561.3% |
Paid-In Capital and Indexed Value are based on a starting index of 100, reflecting the fund’s initial paid-in capital.
To the supporters and friends of Michel Invests,
This is the first annual letter, where we share reflections, observations, and learnings from the past year. 2022 was a year of profound economic shifts and geopolitical tensions that disrupted markets, challenged assumptions, and reshaped how we view opportunities in investing.
From rising interest rates to an energy crisis in Europe, the interplay between macroeconomic forces and sector-specific dynamics highlighted both challenges and opportunities. For Michel Invests, it reinforced the importance of patience, discipline, and a commitment to first-principles thinking.
The Energy Transition: A Complex Reality
2022 was a paradox for energy markets. The long-term vision for renewable energy gained momentum, with significant political backing in the United States through the Inflation Reduction Act (IRA)—a transformative $369 billion initiative aimed at accelerating the green transition. Yet, the year also underscored the challenges of transitioning to a renewable energy economy.
Major players in renewables, such as Ørsted, Vestas, and RWE, struggled. Rising interest rates, supply chain disruptions, and soaring raw material costs eroded profit margins. Offshore wind projects, often hailed as the cornerstone of green energy, were delayed or rendered less economically viable.
Meanwhile, traditional energy sources—especially coal—experienced a surprising resurgence. The Russian invasion of Ukraine disrupted natural gas supplies to Europe, forcing countries to turn back to coal to secure their energy needs. While thermal coal (used for power generation) saw a resurgence, metallurgical coal (essential for steel production) benefitted from a post-pandemic infrastructure boom and rising global demand for steel.
This juxtaposition of renewable struggles and fossil fuel resurgence underscores the non-linear nature of the energy transition. Investors must balance long-term conviction in renewables with an understanding of near-term energy realities.
Monetary Tightening and Its Ripple Effects
In 2022, the U.S. Federal Reserve embarked on one of the most aggressive rate-hiking cycles in its history, raising the federal funds rate from near zero to 4.5% by year-end. The European Central Bank (ECB), grappling with similar inflationary pressures, followed suit with its own rate hikes, marking a pivotal shift in global monetary policy.
These actions had far-reaching consequences:
• Technology Sector Repricing: The era of cheap capital that fueled speculative investments and unsustainable growth came to a dramatic end. Companies like Meta that adapted quickly by cutting costs were rewarded, while others faltered.
• Banking Cracks Emerge: Rising rates exposed vulnerabilities in balance sheets across sectors, setting the stage for the banking crises we witnessed in 2023.
• Private Markets in Limbo: Venture capital funding slowed dramatically as valuations corrected, leading many companies to delay IPOs and conserve cash.
The ECB’s actions, particularly in the eurozone, added another layer of complexity for European companies. With higher borrowing costs and energy price volatility, businesses faced a dual pressure that reshaped their capital allocation priorities.
Lessons from 2022
1. Adaptability in Energy: While renewables represent the future, traditional energy sources cannot be ignored. The divergence in performance between renewables and coal illustrates the importance of flexibility in navigating the transition.
2. Discipline Amid Uncertainty: Rising rates and geopolitical instability reinforced the importance of disciplined investing. Avoiding the temptation to chase speculative growth stories was critical.
3. Patience Pays Off: 2022 reaffirmed the value of long-term thinking. In times of volatility, maintaining conviction in well-researched opportunities often yields the greatest rewards.
Portfolio Updates
2022 was a year of focused execution. We launched Fund-I in January with an index of 100 in capital, growing it to $22 million by year-end—a testament to the power of disciplined investing and identifying undervalued opportunities.
While sectors like renewables faced headwinds, we identified attractive entry points in companies with strong fundamentals and long-term growth potential. Additionally, opportunities in materials and industrial commodities provided significant tailwinds.
Looking Ahead
As we enter 2023, the investment landscape remains complex but ripe with opportunities. Advancements in AI, continued tailwinds in the energy transition, and shifts in global supply chains will likely dominate the narrative.
At Michel Invests, we remain committed to staying ahead of the curve, grounded in research, and focused on delivering long-term value. The road ahead will undoubtedly have challenges, but as 2022 demonstrated, resilience, patience, and first-principles thinking are invaluable.
Respectfully,
Michel Ingenbleek