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 22, 2026
During the third quarter of 2026, the Wasatch Long/Short Alpha Fund Investor Class returned -3.97% net of fees (-3.94% net for Institutional Class), demonstrating defensive outperformance against its primary benchmark, the Russell 2500 Index, which declined -6.37%. Relative outperformance was driven by solid underlying operational execution across self-financing long equity positions alongside successful short alpha generated from deteriorating, speculative business models tied to the artificial intelligence build-out. The strategy capitalized on its disciplined long/short structure to preserve capital amid broader equity weakness. Macroeconomic headwinds dominated the quarter as market participants grappled with rising interest rates, persistent inflation concerns, and escalating geopolitical tensions. The manager highlights a critical structural vulnerability across the small- and mid-cap landscape, noting that approximately 36% of companies within the Russell 2500 Index remain unprofitable. In a restrictive monetary environment where debt capital is increasingly punitive, highly leveraged and speculative businesses face acute refinancing hurdles. Consequently, the fund continues to rotate short exposure toward balance-sheet-strained enterprises while tilting long exposure toward businesses that generate organic free cash flow. Portfolio attribution reflected healthy dispersion across single-stock allocations. Top contributors on the long side included clinical research organization Medpace Holdings and e-commerce facilitator Global-e Online, while cyclical detractors included RBC Bearings and Casella Waste Systems. On the short side, the fund realized notable gains from battery-technology provider Fluence Energy following steep revenue guidance reductions and expanding projected EBITDA losses, offset by an industry-wide technical rebound in enterprise software that temporarily lifted short holding Asana.
The fund seeks long-term capital growth by pairing cash-flow-generative, self-financing small- and mid-cap market leaders on the long side with short positions in unprofitable, highly leveraged businesses facing structural refinancing and operational pressures.
Higher interest rates are expected to present persistent headwinds for the broad small- and mid-cap market, but will create an advantageous backdrop for the fund to short unprofitable, debt-dependent companies while long holdings leverage strong balance sheets to capture market share.
Moderate Conviction Bullish
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