Wolf Hill Capital is a New York-based young hedge fund that was founded only two years ago. It is managed by Gary Lehrman and Jason Pauley, who both previously worked together at Lombard Odier where they compounded at 16% net for the period between 2008 and 2015. The fund applies a long/short investment strategy, looking for small and mid-cap US companies that are experiencing some type of transformational change. The fund returned 74% since its inception, versus 15% for the S&P 500 over the same period. Recently, Wolf Hil Capital released its Q1 Investor Letter – a copy of which you can download below.
Among other things in the letter, the fund reported launching two hedge funds – Wolf Hill Parnter, LP and Wolf HIll Offshore Fund, Ltd – on February 1st, which have managed to return 6.33% in the first quarter of 2019, compared to 5.22% for the S&P 500.
As we began to put capital to work in February, we were leery of chasing many of our favorite long ideas at prices that had rebounded 20+% off their December lows. Fortunately, the market melt-up created attractive entry points to initiate meaningful positions in several high-conviction short ideas while we opportunistically deployed capital into core long ideas. For our abbreviated quarter, the fund generated 303 bps of net performance on our short book and 330 bps of net performance on our long book. Notable contributors on the short side of the ledger were Westshore Terminals, WageWorks, Pearson, and AK Steel.
You can download a copy of Wolf Hill Capital’s Q1 2019 Investor Letter below: