Horizon Kinetics: Navigating Murray's Legacy and the AI Data Center Wave

The investment firm's Q2 2026 call reveals a resilient team, a shift toward targeted marketing, and a contrarian bet on behind-the-grid data center infrastructure.

SLGD · Earnings Call · 2026-08-18

Leadership Continuity and Investment Philosophy

SLGD (Horizon Kinetics) reported its Q2 2026 results on August 18, with the call dominated by reflection on the passing of co-founder Murray Stahl and a clear-eyed assessment of the market's concentration in AI and mega-cap tech. Despite a quarterly net loss attributable to shareholders of $18.4 million, driven almost entirely by mark-to-market losses in its consolidated investment products, the firm's underlying asset management business remains profitable and cash-generative. More importantly, the call revealed a firm that is not only stable after a leadership transition but is actively leaning into a contrarian thesis around the physical infrastructure required for the AI data centers buildout. Peter Doyle and Steven Bregman, co-CEOs, spent considerable time reassuring investors about the firm's future. "We have incredibly talented people here... the people that have stepped up over the last several months have just -- it's just been extraordinary to watch," said Doyle. “We have incredibly talented people here... the people that have stepped up over the last several months have just -- it's just been extraordinary to watch.” — Peter Doyle · 2026-08-18 The firm's core philosophy—high returns on invested capital, long-term horizons, and a willingness to avoid index concentration—remains unchanged. Bregman, in his typical style, used the analogy of stereo sound to describe how their views complement each other, and they both hammered home the idea that most investors are herded into the S&P 500, which now has 49% of its weight in information technology—a figure that does not reflect the true U.S. economic output. This concentration, they argue, leaves investors exposed to businesses that are becoming "cash consuming" as they spend heavily on AI.

Financial Performance and AUM Swings

CFO Mark Herndon reported that GAAP management and advisory revenues were flat at $18.8 million, while operating income fell 19% to $3 million. The company's AUM stood at $10.8 billion at quarter-end, down from $11.4 billion in Q1 but up from $9.6 billion at year-end. The swings were largely due to the fair value changes in Texas Pacific Land (TPL) and bitcoin-related securities. "These swings in AUM were driven significantly by the changes in the fair value of Texas Pacific Land... and our holdings related to various bitcoin-related securities, principally Grayscale Bitcoin Trust," said Herndon. “These swings in AUM were driven significantly by the changes in the fair value of Texas Pacific Land... and our holdings related to various bitcoin-related securities, principally Grayscale Bitcoin Trust.” — Mark Herndon, Chief Financial Officer · 2026-08-18 Despite these valuation hits, the firm has no third-party debt and declared a $0.13 dividend for September. The Bitcoin mining business is a different sector, but the firm's exposure to GBTC is significant, and the call highlighted its volatility.

Positioning for the AI Data Center Buildout

The most compelling part of the call was Bregman's explanation of the firm's positioning in the AI infrastructure chain. He argued that the hyperscalers' capital expenditures are creating an enormous need for land, water, and natural gas—resources that Horizon Kinetics' portfolio companies control. "We're very much invested in the benefits... of playing the whole technology, the AI data center group because we're positioned where we think are the limiting factor and necessary resources after the AI companies, the hyperscalers need in order to build their data centers," Bregman said.

We're very much invested in the benefits, the financial benefits you can have from playing, if you want to use that term, solidarity term at playing the whole technology, the AI data center group because as people who follow us know, we're positioned where we think are the limiting factor and necessary resources after the AI companies, the hyperscalers need in order to build their data centers
Steven Bregman · 2026-08-18

He cited an example of a data center contract signed in Texas where the owner would charge about $2 billion per year in rent for a 1-gigawatt facility, without even counting water sales. This is exactly the kind of behind-the-grid opportunity that won't be affected by proposed data center moratoriums, which Bregman sees as a positive for his companies.

Marketing and Growth Initiatives

The firm acknowledged that its ETF products, particularly the Inflation Beneficiaries ETF (INFL), have underperformed in terms of distribution. Peter Doyle announced a new targeted marketing effort starting in September, focusing on holders of competing ETFs. "We're going to go out there holders of other ETFs that have products similar to ours, and we just think ours are better," he said. “We're going to go out there holders of other ETFs that have products similar to ours, and we just think ours are better.” — Peter Doyle · 2026-08-18 They also noted a large redemption in mutual funds, which they plan to handle differently in the future. The firm is optimistic about its ability to grow AUM through this targeted approach. Overall, SLGD is a firm in transition—respecting its founder's legacy while pivoting toward new growth channels. Its bet on High performance computing infrastructure is a clear differentiator in a market that remains fixated on the semiconductor names. Whether the marketing push succeeds remains to be seen, but the investment thesis is coherent and well-articulated.