Crossroads Capital released its Q1 2026 investor letter and flagged FTAI Aviation as a standout holding, outlining the fund’s recent performance, market context, and why FTAI moved from a special situation into a core holding.
Crossroads reported a solid quarter, with the fund rising 4.2% after fees and expenses. Since inception the firm notes a gross compound return of 21.3% and a net rate of 17.1%, with non-delta adjusted gross and net exposures around the mid-100s and low-70s percent ranges respectively.
The letter pointed to a break in the prior stable trends as geopolitical tensions shifted markets, and Crossroads observed the S&P 500 trimming roughly 4.3% amid that uncertainty. Despite the noise, the firm said Q1 fundamentals still tracked broader industry patterns and delivered opportunities where special situations were accelerating.
Among those opportunities, Crossroads highlighted FTAI Aviation Ltd. as a notable contributor and listed it among the fund’s top ideas. FTAI is described as an aviation company that acquires, owns, and sells aviation equipment; on May 22, 2026 the stock closed at $252.13 per share, with a one-month gain of 9.68% and a 52-week rise near 120.05%. The company sits with a market capitalization reported around $25.86 billion.
Crossroads explicitly framed FTAI’s evolution in the investor letter before quoting at length. The firm emphasized how an initial thesis born in a turbulent stretch matured into a conviction as the company executed on operational and strategic advantages.
“A year ago, FTAI Aviation Ltd. (NASDAQ:FTAI) sat in our special situations bucket, navigating a coordinated short-seller campaign that sent the stock into the low-$80s and created an entry that looked uncomfortable in real time, but had the potential to be a long-term holding. Our original thesis was borne out, but also evolved in advantageous ways, so the company graduated from special situation to emerging compounder.
FTAI is a leading MRO franchise for the CFM56 and is transforming into a capital-light, high-visibility model with its Strategic Capital Initiative (SCI), protected by an irreplaceable competitive advantage in PMA parts.
As a reminder, FTAI captures the best economics in aftermarket aviation not by passively leasing engines, but by operating a vertically-integrated platform (Module Factory + SCI) that manufactures “green time” at a structurally lower cost than OEM pathways. “Green time” is simply the remaining usable life on an engine or component before major maintenance; FTAI creates it by tearing down older engines and using proprietary PMA parts and USM components to rebuild them with serviceable modules (fan/core/LPT) that can be swapped in days rather than waiting months for shop visits. The result is both higher aircraft and engine uptime for customers in a supply constrained market and high-margin Aerospace Products revenue, itself layered on top of leasing, creating an increasingly durable flywheel as scale and parts availability compound. …” (Click here to read the full text)
Outside the quote, Crossroads noted that hedge fund interest in FTAI ticked up, with 56 hedge fund portfolios holding the company at the end of the fourth quarter versus 51 in the prior quarter. That kind of growing institutional ownership reinforced the firm’s view that FTAI had moved past a purely speculative call into something more durable.
The letter also stressed the structural advantages FTAI enjoys in aftermarket aviation, especially around PMA parts and module repairs that shorten downtime for operators. Crossroads sees those operational levers as the backbone of a higher-margin aerospace products business layered on a leasing platform, producing a compounding economic model as scale and parts availability improve.
For investors watching special situations and emerging compounders, Crossroads left readers with a clear signal: FTAI is now treated as a core piece of the portfolio rather than a short-term trade. The fund’s top-five holdings list names FTAI among several high-conviction positions that guided the letter’s tone for Q1 2026.
