Hedge fund letters: what they are and how to read them

A hedge fund letter is the periodic write-up a fund sends to its investors. It reports performance, explains what the manager bought or sold, and — the part that matters most to outsiders — argues why. We read the letters we can obtain and turn each stock pitch inside them into a readable page, with the fund's own wording kept intact.

What is inside a hedge fund investor letter?

Format varies by manager, but most letters cover the same ground: the period's return and how it compares with a benchmark, commentary on markets, a handful of position write-ups, and notes on portfolio changes. The position write-ups are the substance. A good one states the business, the price paid, the thesis, what has to go right, and what would make the manager wrong.

Letters versus 13F filings

A 13F is a quarterly regulatory filing listing US equity holdings. It tells you what a fund owned at a point in time, and nothing about why. It is also backward-looking by up to 45 days, excludes shorts, and excludes non-US listings.

A letter is the opposite trade-off. It is not complete and it is not audited by a regulator, but it carries reasoning: valuation, catalysts, downside, conviction and intended holding period. If you want to understand a manager's thinking rather than reconstruct a portfolio, the letter is the better document.

How to read a letter critically

Separate claim from evidence. A thesis is a claim. Numbers, filings and industry data are evidence. Letters usually contain more of the first.
Look for the bear case. Managers who state clearly what would break the position tend to be describing real analysis.
Check the date. A position described in a second-quarter letter may already be closed. Letters are periodic, not live.
Watch for selection. Letters discuss the positions the manager wants to discuss. Winners get more space than losers.
Note position sizing language. "A starter position" and "our largest holding" carry very different conviction.

Are hedge fund letters public?

Some are. Many managers publish letters or commentary openly, and fund shareholder reports for registered funds are filed publicly. Others circulate only to investors. We work from letters and reports that are publicly distributed, and we do not republish source PDFs — only the extracted idea, the reasoning, and a short quote with attribution to the fund.

How we turn letters into pages

For each stock pitch in a letter we record the fund, the ticker, whether the position is long or short, the thesis in the manager's framing, the stated risks, and conviction and time horizon where the letter gives them. That becomes one page per idea, grouped so you can read by fund or by ticker. Right now the archive covers 1,018 ideas from 244 funds, and nothing is behind a signup.