Key Takeaways
- • Half Moon Capital Partners generated a net return of 12.9% during Q2 2025, outperforming the S&P 500 (10.9%), Russell 2000 (8.5%), and HFRI Hedge Fund Index (7.9%) with 97.7% average net exposure.
- • The fund's long book delivered 12.4% gross returns in Q2, contributing 16% to overall performance as management grossed-up positions during April market volatility; Primoris Services Corp, Lyft, Roku, Reddit, and Daktronics were identified as top-performing longs.
- • Half Moon's short book posted a -9.1% gross return in Q2, detracting 2.9% from gross attribution on a dollar basis, though the fund strategically covered shorts positioned during April upheaval.
- • The fund employed selective industry hedges to offset temporary selling pressure on certain positions and capitalized on April market dislocations by covering previously pressed short positions as conditions evolved.
- • Half Moon Capital maintains conviction in an unnamed energy EPC (engineering, procurement, and construction) company and holds a short position in an unspecified medical equipment manufacturer, reflecting sector-specific views communicated in Eric DeLamarter's Q2 investor letter.
Summary
Half Moon Capital Partners, the concentrated research-intensive equity hedge fund founded by Eric DeLamarter in 2011, posted second-quarter net gains of 12.9%, substantially exceeding broad market benchmarks and hedge fund peer performance. The outperformance came despite a challenging market environment marked by April volatility, with the fund maintaining a robust 97.7% average net exposure during the period. This result places Half Moon among stronger performers in the hedge fund universe, surpassing the S&P 500's 10.9% return, the Russell 2000's 8.5% gain, and the broader HFRI Hedge Fund Index's 7.9% jump.
The fund's long book was the primary engine of returns, generating 12.4% gross returns and contributing 16% to overall performance. Half Moon's management demonstrated tactical acumen by grossing-up positions during the April market turmoil, capitalizing on dislocations and volatility to enhance exposure when valuations became attractive. The strongest performing long positions included Primoris Services Corp (NYSE: PRIM), Lyft (NASDAQ: LYFT), Roku, Reddit, and Daktronics, spanning sectors from energy services to consumer technology.
The short book presented a headwind, delivering a -9.1% gross return that subtracted 2.9% from overall contribution on a dollar-basis. Rather than treating shorts as a permanent drag, Half Moon deployed them tactically during market stress—pressing certain short positions into the April upheaval and subsequently covering them as market conditions evolved and opportunities shifted. This approach reflected active risk management rather than a static hedge framework.
To mitigate downside from market-wide selling pressure affecting certain holdings, Half Moon employed selective industry hedges during the volatile period, effectively isolating stock-specific risks from broader macro headwinds. In his Q2 investor letter, DeLamarter highlighted two sector-specific conviction trades: a long position in an unnamed energy EPC company and a short position in an unspecified medical equipment manufacturer, signaling thematic views on capital intensity, competitive dynamics, and valuation dispersion within industrial and healthcare equipment subsectors.
The fund's long book was the primary engine of returns, generating 12.4% gross returns and contributing 16% to overall performance. Half Moon's management demonstrated tactical acumen by grossing-up positions during the April market turmoil, capitalizing on dislocations and volatility to enhance exposure when valuations became attractive. The strongest performing long positions included Primoris Services Corp (NYSE: PRIM), Lyft (NASDAQ: LYFT), Roku, Reddit, and Daktronics, spanning sectors from energy services to consumer technology.
The short book presented a headwind, delivering a -9.1% gross return that subtracted 2.9% from overall contribution on a dollar-basis. Rather than treating shorts as a permanent drag, Half Moon deployed them tactically during market stress—pressing certain short positions into the April upheaval and subsequently covering them as market conditions evolved and opportunities shifted. This approach reflected active risk management rather than a static hedge framework.
To mitigate downside from market-wide selling pressure affecting certain holdings, Half Moon employed selective industry hedges during the volatile period, effectively isolating stock-specific risks from broader macro headwinds. In his Q2 investor letter, DeLamarter highlighted two sector-specific conviction trades: a long position in an unnamed energy EPC company and a short position in an unspecified medical equipment manufacturer, signaling thematic views on capital intensity, competitive dynamics, and valuation dispersion within industrial and healthcare equipment subsectors.
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