Greystone's Q2 2026 Letter: Skip the AI Hype, Dig Into Less Popular Small Caps

Greystone's Q2 2026 letter points investors away from crowded AI trades

The useful signal here is not that AI is real. It is that a manager with capital at risk is deliberately looking elsewhere. Greystone's Q2 letter is now available, and it matters because it offers a fresh view on where the firm is choosing to hunt while much of the market remains focused on crowded themes.

What makes the letter worth reading is not the format. It is the transparency around decision-making. Greystone's partners normally communicate once per quarter in the form of a letter. The firm also says Plenty of time is spent constructing each letter so partners should understand the thought processes behind our decision making. That makes the letter useful not just as a holdings update, but as a window into the firm's process.

The key shift is explicit. Wilk says he spends very little time discussing AI and instead focuses on allocating your capital to less popular areas of the market. For readers evaluating the team, Greystone Capital Partners LP is the go-forward vehicle for new capital and is currently open to subscriptions.

The core idea is a price-vs-favor debate, not an AI-vs-no-AI debate

Why less popular markets can offer better odds

Greystone's approach is straightforward: in popular trades, much of the upside may already be recognized. In less popular parts of the market, there is often less attention and more room for a strong business to be underappreciated.

In this quarter's letter, Wilk says he spends very little time discussing AI and instead focuses on allocating your capital to less popular areas of the market. The underlying idea is not that unpopular stocks always work. It is that unfavorable sentiment can create gaps between business quality and price, and those gaps can close if the analysis is right.

Why a real theme can still be a crowded trade

The bull case for AI is easy to understand: spending is happening, demand is visible, and leaders may compound for years. Greystone is not really disputing that. The more subtle point is that a real theme can still be priced with very little room for error.

That is the practical distinction behind the quarter's message: a real secular trend is not, by itself, enough to make the crowded trade easy to own at any price.

What the Despegar example actually shows

Despegar is a useful reminder that strong businesses can still look like poor investments for long stretches. Greystone's Q4 2024 letter highlighted Despegar, and Wilk said I made a costly mistake of omission in failing to purchase shares of Despegar.com, Corp. (NYSE:DESP) below $10/share this year, or at any point during the past few years.

That example does not prove that neglected stocks always rerate. It shows that market impatience can persist even when a business is improving, which is the kind of disconnect Greystone is interested in.

What to take from the named examples

PBI, NRP, KITS, and FOUR are a lens, not a buy list

Wilk says he discussing the source of some of our best investment ideas since inception while talking about $PBI, $NRP, $KITS and $FOUR. The point is not that readers should blindly copy those names. The point is that they illustrate Greystone's preferred hunting ground: less popular areas of the market.

A simple first pass is to ask three questions:

• Is the business easy to picture? Can you explain what it does and how it makes money without stretching the model?
• Is the cash stream believable? Does the company look capable of generating cash after maintaining its competitive position?
• Is the stock judged more by mood than by operating reality? Is the market ignoring it because the story is dull, or because the fundamentals are actually worsening?

The main risk is balance-sheet strain, not dullness

The warning label matters. A business can be simple to understand and still be a bad investment if debt turns a routine slowdown into a serious problem. That is why operating clarity and cash generation need to be paired with balance-sheet discipline.

How to use the letter in practice

Treat this letter as a screening lens, not a scorecard. The practical takeaway is a watchlist built around overlooked industries, operations, and service businesses - the kind of ground Greystone scans when he puts very little time discussing AI and instead focuses on less popular areas of the market.

Next updates to watch

• Greystone normally communicates once per quarter in the form of a letter. Readers can join the distribution list on the Letters page to receive future communications.
• Reporting is expected to shift over time. Greystone says Once the transition is complete, reporting will move to the fund level, and future letters will be published under Greystone Capital Partners.
• The example set still matters. Wilk recently discussed $PBI, $NRP, $KITS and $FOUR in the context of the source of some of our best investment ideas since inception, so it is worth watching whether similar names continue to fit the firm's framework.

The main takeaway is simple: this letter is most useful when it helps readers look for better price-vs-quality mismatches, rather than treating it as proof that one theme is finished and another is just waiting to be discovered.