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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Wasatch Long Short Alpha Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Wasatch Long Short Alpha Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

Wasatch Long Short Alpha Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Wasatch Long Short Alpha Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+5.87%

Positioning StanceConstructive

Market CapSmallCap

GeographyUS

Digest Analysis

Quick Take

"Wasatch Small Cap Growth underperformed in Q1 2025 as tariff concerns weighed on markets. Despite headwinds from Globant, Agilysys, and Freshpet, the strategy benefited from Intra-Cellular's acquisition by J&J and strong performance from Dutch Bros and RBC Bearings."

Executive Summary

The Wasatch Small Cap Growth strategy declined and underperformed the Russell 2000 Growth Index during Q1 2025, as U.S. equities lost ground amid concerns about potential tariffs and government funding cuts. The Russell 2000 Growth Index fell 11.12% for the period. Key detractors included Globant SA, which faced mixed operating results and softer 2025 guidance despite benefiting from early-stage AI implementation trends. Agilysys and Freshpet also weighed on performance due to lighter earnings and revenue growth, respectively. Top contributors included Intra-Cellular Therapies, which was acquired by Johnson & Johnson for $14.6 billion, Dutch Bros with strong fundamentals and expansion plans, and RBC Bearings with steady aerospace and defense growth. The managers maintain their focus on high-quality businesses with strong balance sheets, essential products, and excellent management teams. They believe these companies can successfully navigate tariff uncertainty and other macroeconomic headwinds while delivering superior long-term growth. The team continues to use market volatility as an opportunity to add to positions when stocks trade lower.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

80%

CautiousHigh

High Conviction (80%)

The manager emphasizes maintaining discipline through volatility, adding to positions when stock prices drop, and remaining highly confident in the long-term growth thesis of held companies.

Growth Outlook

35%

BearishBullish

Bearish (35%)

The manager highlights near-term macroeconomic headwinds such as tariffs, softer economic data, and market volatility, though they maintain a long-term constructive view.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Positioning focuses on high-quality businesses with strong balance sheets and essential products to withstand economic softening rather than aggressive risk-taking.

Capital Deployment

30%

De-riskingDeploying

De-risking (30%)

Capital was actively reallocated by trimming/selling top performers that reached high valuations and selectively buying lower-priced shares of detractor positions.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

While acknowledging near-term tariff and earnings uncertainty across industries, the manager expects portfolio holdings to successfully navigate challenges and outperform over a longer horizon.

Language Signal

70%

BearishBullish

Bullish (70%)

The tone is calm, confident, and analytical, asserting that short-term fluctuations will not disrupt their fundamental bottom-up research process.

Perceived Risk

20%

Low RiskElevated

Low Risk (20%)

The report highlights elevated external risks including potential tariffs, deeper trade war concerns, global economic growth deceleration, and general market volatility.

Opportunity Density

40%

ScarceAbundant

Selective (40%)

The manager identifies attractive long-term entry points created by short-term market overreactions and secular trends like AI adoption.

Time Horizon

90%

Short-TermLong-Term

Decade+ (90%)

The commentary repeatedly stresses taking a five-year or longer perspective rather than investing based on next-month or next-quarter forecasts.