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 |
|---|---|---|---|---|---|---|
Diameter Capital Partners reported a +0.3% net return for the Diameter Master Fund in 4Q25. The letter outlines significant performance headwinds from legacy distressed positions, specifically EyeCare Partners and a severe loss in First Brands due to extensive accounting fraud. Despite these challenges, the firm succeeded in credit investments like EchoStar, Signature Bank bonds, and Credit Suisse AT1s. Looking ahead to 2026, the firm highlights critical investment themes including Chinese overcapacity in chemical markets, grid-capacity constraints affecting AI datacenters, the rapid and potentially sloppy growth of Asset-Backed Finance (ABF) driven by insurance annuity demands, and a highly bifurcated US consumer landscape.
Successfully investing in credit and distressed situations requires strict operational controls, independent source verification, and avoiding complex structures where yield is used to compensate for poor fundamental underwriting or structural residual risk.
The manager expects continued dispersion in the markets driven by massive upcoming corporate issuance. 2026 will see substantial activity in credit restructuring ('capital solutions'), a continuation of heavy strategic M&A, and significant pricing volatility across energy, consumer, and packaging sectors. Broad market indices will face headwinds from a weakening low-income consumer and policy-driven healthcare uncertainty.
As of Jan 8, 2026
Founded in 2017 by Scott Goodwin and Jonathan Lewinsohn, Diameter Capital Partners has grown to manage $25 billion in firmwide assets. Scott Goodwin brings eight years of experience from Citi as Head of High Yield Trading and leadership of the global trading desk at Anchorage Capital, known for his 'speed of capital' philosophy emphasizing rapid decision-making. Jonathan Lewinsohn contributes legal expertise with a J.D. from Yale Law School and investment experience as Senior Managing Director at Centerbridge Partners and Head of North America Research at Anchorage Capital. The founding partners combine deep credit market expertise with complementary skills in trading, fundamental research, and strategic analysis. Recent achievements include raising $4.5 billion for their Dislocation Fund III in November 2025, surpassing the hard cap, and securing a strategic minority investment from Apollo Global Management in 2022.
Diameter Capital Partners employs a diversified credit platform built on core investment principles emphasizing consistency through market cycles. The firm combines fundamental research with trading expertise and risk analytics to target attractive opportunities across public and private asset classes. Their differentiated approach utilizes a broad mandate to constantly evaluate relative value within and across asset classes and capital structures to produce superior absolute returns. Core principles include investing across the credit spectrum from investment grade to distressed assets, integrating fundamental research with technical trading, maintaining a flat organizational structure for swift decisions, and focusing on relative value to achieve superior absolute returns. The firm emphasizes 'speed of capital' as a key differentiator, maintaining nimbleness and readiness to act quickly on market opportunities while adhering to a culture of meritocracy and intellectual honesty with full alignment to limited partners.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
High-conviction positioning: Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Growth Outlook
Market outlook remains moderate conviction: Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Risk Appetite
Risk appetite posture is above average conviction: Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Forward Guidance
Forward guidance signal: Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Language Signal
Tone analysis indicates above average conviction language: Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Perceived Risk
Perceived risk level is evaluated as high conviction. Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Opportunity Density
Opportunity density index indicates above average conviction actionable entry points. Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Time Horizon
Investment time horizon reflects a high conviction orientation. Diameter's 4Q25 letter candidly details a painful distressed loss in First Brands due to fraud, while outlining a cautious but active 2026 playbook focused on bespoke capital solut...
Top Conviction Themes
Key Catalysts
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