Global equity and bond market weakness accelerated in September as investors adjusted their views to the reality that central banks will need to keep rates higher for longer to fight persistent inflation. Despite building evidence that demand is slowing, U.S. Federal Reserve commentary remained hawkish with a stated priority of fighting inflation at the expense of growth. As such, equity indices returned to lows as bond yields shot up to levels not seen since the financial crisis. The overall market narrative has largely shifted to when, not if, a recession will occur. Within this backdrop, the Fund continues to deploy capital to long investments with visible growth prospects that should be independent of the timing or magnitude of a recession. On the short side, the Fund continues to rotate through our focus list names that face a combination of secular and cyclical pressures that will only be exacerbated by a recession.
We maintain that Roubaix could serve a beneficial role in most client portfolios that lack small cap exposure in their hedged or overall equity allocations, whether biased to long-only, directional or market neutral exposure. Our strategy is conveniently available as an onshore or offshore limited partnership, separately managed account, or UCITS format with daily liquidity. I am happy to walk through our performance and process in greater detail at your convenience. In the near-term, our founder and portfolio manager Chris Hillary will be available for in-person meetings in NYC November 1-4, or anytime via voice/video call. In the meantime, our Q3 investor letter and updated pitch book should be completed later this week and are available upon request. I look forward to hearing from you soon!
Regards,
Greg Parcella
Director of Marketing & Client Relations
