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 | 12/31/23 index value | Gross Portfolio Multiple | Net TVPI | DPI | Gross IRR | Net IRR to LPs |
| Fund-I (2023) | 100 | 333.33 | 3.3 | 3.3 | 0 | 206.1% | 206.1% |
Michel Ingenbleek
March, 2024
Dear Friends and Supporters,
2023 was a year of profound change in the global economy, energy systems, and technology landscape. While challenges abounded, they also created opportunities for thoughtful investors to navigate uncertainty and identify areas of potential growth. I want to take this opportunity to reflect on key macroeconomic and technological trends, share my insights, and outline how they shape the way I approach investing.
My philosophy remains rooted in the belief that investing is not just about identifying undervalued assets—it’s about understanding the systems that drive value creation. By focusing on first principles, avoiding noise, and remaining disciplined in execution, we can navigate even the most volatile environments with clarity and purpose.
2023 in Review: Macroeconomic Shifts and Implications
1. Inflation and Interest Rates
The Federal Reserve’s aggressive rate hikes since 2022 continued into 2023, pushing rates to their highest levels in decades. The Federal Funds Rate reached 5.5%, its highest level in over two decades, as the Fed sought to combat inflation. While inflation moderated from its 2022 highs, persistent price pressures reminded us that monetary tightening is a slow process. Despite the rate hikes, consumer spending and GDP growth in the U.S. remained resilient, defying fears of a deep recession.
Meanwhile, across the Atlantic, the European Central Bank (ECB) faced a similarly challenging environment. The ECB raised its deposit facility rate to an unprecedented 4% by September 2023, marking its highest level since the Eurozone’s creation. The ECB’s efforts to curb inflation faced additional hurdles due to Europe’s dependence on imported energy and the lingering effects of the Russia-Ukraine conflict. Unlike the U.S., where economic growth remained steady, the Eurozone experienced stagnation, with Germany slipping into a mild recession. This divergence highlighted the complex interplay of monetary policy, energy dependence, and geopolitical tensions.
For energy and technology, these macroeconomic shifts recalibrated valuations and forced companies to refocus on fundamentals. Capital-intensive industries, particularly renewable energy and EV manufacturing, grappled with higher borrowing costs. However, federal and regional incentives, such as the Inflation Reduction Act in the U.S. and the EU Green Deal Industrial Plan, injected much-needed momentum into clean energy projects, signalling a long-term bullish trend for innovators in this space.
2. AI: From Potential to Reality
2023 was the year artificial intelligence (AI) cemented itself as a transformative force across industries. Generative AI tools like ChatGPT achieved staggering adoption rates, enabling rapid advancements in productivity, research, and product development. AI-powered solutions reduced costs and timelines in sectors like drug discovery, material science, and autonomous systems.
However, the rapid adoption of AI also disrupted incumbents who failed to adapt. As traditional competitive moats eroded, lean startups leveraged AI to outpace established players in efficiency and innovation. This has created a new paradigm for investing: identifying companies that pair proprietary data with AI-enabled capabilities to build defensible business models.
Looking forward, I believe the two key areas of value creation in AI will be:
1. Proprietary Data: Companies that own unique, high-quality datasets will wield a significant advantage in training and fine-tuning AI models.
2. AI Infrastructure: The systems that enable faster, cheaper, and more reliable AI applications—such as advanced chips, cloud-based AI platforms, and edge computing solutions—are critical to scaling AI’s impact.
3. Energy: A Pivotal Year for Transition
The global energy transition reached a critical juncture in 2023. While geopolitical instability, particularly in Eastern Europe, underscored the risks of energy dependence, it also accelerated investment in renewable energy, energy storage, and grid modernisation.
Key themes emerged:
• Re-shoring Energy Production: Countries prioritised energy independence by investing in domestic production of renewables, nuclear power, and advanced battery technologies.
• Electrification and Decentralisation: Residential solar installations and community-based energy storage grew rapidly, fuelled by falling costs and consumer demand for resiliency.
However, the transition is not without challenges. Infrastructure bottlenecks and rising interest rates strained many projects, while the sheer scale of necessary investment highlighted the importance of public-private partnerships. For investors, the energy transition represents one of the most significant opportunities of the decade—provided we balance long-term vision with disciplined execution.
My Investment Philosophy
At Michel Invests, our approach centers on three core pillars:
1. First Principles Thinking: We strip away assumptions and focus on the fundamental drivers of value in any opportunity. This helps us remain disciplined and avoid being swayed by market fads.
2. Macro-Informed Strategy: Understanding the broader economic and geopolitical landscape is essential to identifying trends that will shape industries and markets over the long term.
3. Sustainable Value Creation: Our focus is not just on financial returns but on backing companies and technologies that contribute meaningfully to society—whether through innovation, efficiency, or solving critical challenges like climate change.
Looking Ahead to 2024
While 2023 presented significant headwinds, it also laid the groundwork for transformative opportunities. Here’s what I’m focusing on as we move into 2024:
• Deep Tech and AI: Continued exploration of how AI and frontier technologies can solve entrenched problems in industries ranging from healthcare to manufacturing.
• Energy Infrastructure: Identifying scalable solutions that address the bottlenecks in renewable energy deployment, from battery production to grid modernisation.
• Macro Stability: Monitoring the interplay between monetary policy, fiscal stimulus, and geopolitical tensions to navigate volatility effectively.
Innovation continues to press on, even in the face of adversity. By staying disciplined, informed, and open to learning, I am confident we can navigate whatever lies ahead and emerge stronger.
Thank you for your continued support. Let’s keep building the future.
Respectfully,
Michel Ingenbleek