Adams Hill Capital 2014 Q2 Investor Letter

Insider Monkey obtained Andrew Schwartz’s and Adams Hill Capital’s 2014 Q2 investor letter. Andrew Schwartz previously worked at Steven Cohen’s SAC Capital investing in basic materials, metals, mining, industrial, and energy shares. You can see their entire 13F portfolio here. Andrew Schwartz launched Adams Hill Capital at the beginning of 2013. The fund had negative returns in 2013 but is now in black after delivering an 11.2% net gain during the first 6 months of 2014. Here are a few excerpts from Adams Hill Capital’s investor letter:

“As of June 30th, our top ten long equity positions listed alphabetically were AK Steel Holding Corp., Allison Transmission Holdings, Inc., Angang Steel Co., BHP Billiton Ltd., Boise Cascade Co., Boliden AB, Cabot Oil & Gas Corp., Range Resources Corp., Steel Dynamics Inc. and The Ryland Group Inc. The market value of our top ten long equity positions collectively represented 53.11% of our gross exposure. The market value of our top ten short equity positions collectively represented 60.51% of our gross exposure. Our top 5 short positions included a Basic & Diversified Chemical Company, a Fertilizer Producer, a Gold Mining Company, an Integrated Oil Company, and an Integrated Utility.

The outlook for the portfolio and the companies comprising our universe remains robust and dynamic. The themes discussed in our Q1 letter continued to play out in Q2. We believe that these themes are continuing to unfold while others are just now beginning to take shape. The themes that we have discussed in recent letters – increasing free cash flow, stabilizing margins and increased M&A were evident in Q2. We also believe that the market is still misunderstanding the company specific drivers of the equity prices of many companies in our universe a factor which has us very excited about our potential to continue to generate returns with a low net strategy.

…We look forward to continuing to uncover names with differentiated viewpoints and return streams, and we are confident in our ability to generate returns across a wide range of market sectors and conditions.”