Blue Hawk Investment Group’s Q1 2019 Investor Letter

Blue Hawk Investment Group, LLC is the management company of a long/short fund, Blue Hawk Fundamental Growth Fund, LP. It was founded by Jake DuBois, who it the current fund’s manager. Jake DuBois graduated with B.A. in Psychology from Emory University and with M.B.A. in Asset Management from University of Virginia Darden School of Business. Blue Hawk Investment Group recently published its Q1 2019 Investor Letter, a copy of which you can download below. For the quarter, the fund reported a net return of 2.88%, underperforming the S&P 500 which gained 13.06%.

“Dear Investor,

The Q1 2019 net return for the fund was 2.88%. This compares to a return of 13.06% for the S&P 500, 3.07% for Equity Long Short Funds1, and 8.51% for Fundamental Growth Hedge Funds2.

After a strong second half to end 2018, the fund lagged in Q1 dragged down by the short book. Stocks bounced back as investors responded to the Fed’s dovish pivot by plowing back into risky assets. Stocks shot up across the board – particularly lower quality stocks as these companies typically have more sensitivity to interest rates due to their higher debt levels, increased exposure to floating rate debt, and lower earnings and cash flow base to cover interest payments.

Our quality bias we believe allows the fund to hold up in times of financial stress. Conversely, in times of easing macroeconomic conditions, lower quality businesses tend to outperform at least in the short run. Our view is that these gains are one time in nature and impossible to predict (what interest rates will do that is) and that quality wins out over the long term.

The format of the letter is as follows: (1) Notable Changes to the Portfolio (2) Contributors and Detractors concluding with (3) Investment Commentary in which we discuss the Uber/Lyft IPOs and the state of tech investing current day.”

 

You can take a look at entire copy of Blue Hawk Investment Group’s Q1 2019 Investor Letter here:

Q1-2019-Investor-Letter

You can also see the list of our 2019 Q1 investor letters and download them on this page.