Key Takeaways
- • High Ground Investment Management, the London-based, Europe-focused long-short hedge fund led by former TCI partner Edgar Allen, is up 15.39 percent year to date through September 2026, following a 39.41 percent gain in 2025.
- • The fund is outperforming the S&P 500 while holding none of the handful of AI stocks that have driven outsized index gains.
- • Performance this year has been driven by European financials and U.S. managed health care on the long side, according to a source familiar with the results.
- • At the end of August, the top five longs were four financials and one health care company: AIB Group, Legal & General, Elevance Health, Arch Capital Group and Euronext.
- • In August the fund was roughly 53 percent net long, with a net zero North American exposure and financials as its largest sector bet at 45.5 percent net long.
Summary
High Ground Investment Management has posted solid gains in 2026 after a breakout year in 2025. According to Institutional Investor, the London-based, Europe-focused long-short hedge fund is up 15.39 percent for the year through September, after surging 39.41 percent in 2025. The fund is outperforming the S&P 500 even though it does not own the handful of AI stocks that have powered broad market indices.
Founded in 2019 and headed by Edgar Allen, formerly a partner at TCI and before that at Naya Capital Management, High Ground invests in a universe of 135 companies in long-cycle industries with operational visibility roughly 25 years into the future and returns above their cost of capital. The short book targets companies exposed to negative secular trends, such as shifts that could permanently impair a sound business. Performance this year has been driven by European financials and U.S. managed health care on the long side, according to someone who has seen the results.
Two of High Ground's seven U.S.-listed common stocks are health care related. Humana shares surged nearly 50 percent in the first nine months of 2026, and Elevance Health, the largest U.S.-listed long, added 11 percent. The five largest long positions account for 45 percent of the long book and the top ten for 76 percent.
According to the fund's August monthly exposure report, High Ground was roughly 53 percent net long. Europe accounted for the bulk of that exposure, mainly from the United Kingdom and Ireland and, to a lesser extent, the Netherlands. North America was net zero, at 32.6 percent long and 32.6 percent short. By sector, financials received the largest bet, with gross exposure of about 59 percent and net long exposure of 45.5 percent across banks, capital markets and insurance. Industrials followed with 46 percent gross and 14.5 percent net long.
At the end of August, the five largest longs were AIB Group, Legal & General, Elevance Health, Arch Capital Group and Euronext. AIB, Legal & General and Arch were also top-five holdings heading into 2026.
Founded in 2019 and headed by Edgar Allen, formerly a partner at TCI and before that at Naya Capital Management, High Ground invests in a universe of 135 companies in long-cycle industries with operational visibility roughly 25 years into the future and returns above their cost of capital. The short book targets companies exposed to negative secular trends, such as shifts that could permanently impair a sound business. Performance this year has been driven by European financials and U.S. managed health care on the long side, according to someone who has seen the results.
Two of High Ground's seven U.S.-listed common stocks are health care related. Humana shares surged nearly 50 percent in the first nine months of 2026, and Elevance Health, the largest U.S.-listed long, added 11 percent. The five largest long positions account for 45 percent of the long book and the top ten for 76 percent.
According to the fund's August monthly exposure report, High Ground was roughly 53 percent net long. Europe accounted for the bulk of that exposure, mainly from the United Kingdom and Ireland and, to a lesser extent, the Netherlands. North America was net zero, at 32.6 percent long and 32.6 percent short. By sector, financials received the largest bet, with gross exposure of about 59 percent and net long exposure of 45.5 percent across banks, capital markets and insurance. Industrials followed with 46 percent gross and 14.5 percent net long.
At the end of August, the five largest longs were AIB Group, Legal & General, Elevance Health, Arch Capital Group and Euronext. AIB, Legal & General and Arch were also top-five holdings heading into 2026.
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