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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Blue Tower Asset Management. This analysis is provided for institutional research purposes only and is not investment advice.
"Blue Tower gained 18.91% net in Q2 2026 on Enova strength, bringing YTD to 20.84%. The manager holds Petrobras and SM Energy as the Iran War disrupts Hormuz oil flows."
Blue Tower Asset Management delivered 18.91% net returns in Q2 2026, bringing YTD performance to 20.84% net, driven primarily by gains in Enova International despite elevated volatility around its pending Grasshopper Bank merger. The manager built positions in Petrobras and SM Energy in Q1 as both portfolio hedges and standalone investments in the energy sector. The 2026 Iran War has disrupted oil flows through the Strait of Hormuz, but initial market buffers have prevented extreme price increases. These buffers included pre-war inventory builds, China drawing down its 1.4 billion barrel strategic reserve while reducing imports by 74% of the global crude trade decline, and alternative export routes through Saudi and UAE pipelines. However, these protections are nearing exhaustion. China is now removing refinery restrictions and resuming normal market participation, while global strategic reserves continue depleting. With fighting resumed after the collapsed ceasefire, the manager expects oil prices to rise significantly as supply-demand imbalances intensify. Energy E&P companies trade at historically cheap valuations with improved capital discipline, generating free cash flow for shareholders rather than destroying value through overinvestment. Growing AI data center demand is also increasing energy consumption, with facilities using on-site gas generation due to overburdened electric grids.
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