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 Small Cap Growth strategy declined in absolute terms but outperformed its benchmark, the Russell 2000 Growth Index, which dropped -9.39%. Relative outperformance was primarily driven by resilient fundamental execution across holdings and intentional avoidance of speculative, non-earning artificial intelligence businesses that suffered severe multiple contraction. The portfolio remains structured around self-financing, profitable growth franchises, with management highlighting that 45% of Russell 2000 Growth Index constituents remain unprofitable and highly vulnerable to persistent capital costs. The macroeconomic environment was characterized by rising interest rates, inflation concerns, and geopolitical tensions, which triggered broad multiple compression across small-cap equities. Within the portfolio, management observed that forward-looking corporate health proved exceptionally resilient, noting that the share of portfolio companies receiving positive forward revenue estimate revisions of 3% or more reached a four-year high, while not a single portfolio holding received a downward revision. Individual performance was led by strong contributions from Paymentus Holdings, Repligen, and Global-e Online, each delivering earnings beats and raising full-year guidance. Conversely, performance was dampened by short-term sell-offs in high-quality AI infrastructure suppliers AAON and Nova Ltd., alongside beverage retailer Dutch Bros, which derated in tandem with discretionary restaurant peers despite reporting greater than 32% revenue growth and expanding same-shop sales.
Focus on high-quality, self-financed small-cap companies generating strong free cash flows and enduring earnings growth, avoiding unprofitable and debt-dependent speculative businesses.
Management believes the strategy is well positioned to outperform in an elevated interest-rate regime by holding self-funded companies with positive revenue revisions that can capture market share from debt-laden, unprofitable competitors.
Moderate Conviction Bullish
Market Conviction
Growth Outlook
Risk Appetite
Capital Deployment
Forward Guidance
Language Signal
Perceived Risk
Opportunity Density
Time Horizon
Top Conviction Themes
Key Catalysts
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