The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 19, 2026
The Conestoga SMid Cap Composite returned -8.65% net of fees in the third quarter of 2026, outperforming the Russell 2500 Growth Index benchmark return of -10.35%. Year-to-date, the strategy has returned -12.23% net of fees compared to +7.28% for the benchmark. While high-beta, momentum-driven market leadership weakened considerably, higher-quality company attributes—such as robust margins and lower beta—helped protect capital on a relative basis. Negative sector performance was heavily concentrated in Industrials, which slid 16% across the benchmark, though positive stock selection and overweight positioning in Software and Health Care suppliers partially cushioned broad equity declines. Cash stood at 3.1% of assets at quarter-end. Macroeconomic crosscurrents dominated the quarter as persistent inflation prints, resilient labor market conditions, and crude oil spiking above $101 per barrel due to Middle East tensions pushed Treasury yields across the 10- and 30-year curves to 25-year highs. The Federal Reserve raised the federal funds rate by 25 basis points in September to a 3.75%-4.00% target range. Although premium-multiple growth stocks faced valuation compression, Conestoga maintains that the market's transition to a mid-cycle regime will increasingly reward disciplined compounders exhibiting durable business models, conservative capital structures, and pricing power. Portfolio turnover during the quarter included additions on twelve occasions and trims on thirteen occasions. The manager initiated new positions in Allegro Microsystems, MACOM Technology Solutions, Sterling Infrastructure, Standex International, SEI Corp., and Cognex Corp., targeting secular beneficiaries in electrification, advanced defense electronics, and data center infrastructure. Conversely, the strategy exited Bio-Techne following its announced acquisition by Merck KGaA, alongside divestments in Workiva, Bright Horizons Family Solutions, and EVI Industries to redeploy capital into higher-conviction franchises.
Conestoga seeks to achieve superior risk-adjusted long-term returns by investing in high-quality small- and mid-cap companies with durable competitive advantages, conservative balance sheets, strong management teams, and high returns on invested capital.
Conestoga anticipates that as corporate earnings growth moderates from cyclical peaks and Treasury yields remain elevated, the market will increasingly reward resilient companies with durable business models, strong management teams, and the capability to grow through higher-cost operating environments.
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