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Peconic extends winning run with 18% YTD gain

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Peconic Partners, the $1.8bn long-short hedge fund firm run by Bill Harnisch, has continued a four-year winning run so far in 2024, with the fund up 18% year-to-date, extending a run of outperformance that includes a 26% gain in 2022 when the S&P 500 lost nearly 20%, according to a report by Bloomberg.

The report cites Harnisch in an interview as crediting Peconic’s recent success to a number of bold stock wagers, including a bearish bet against coffee chain Starbucks, as well as bullish positions in long-held infrastructure plays like Quanta Services and Dycom Industries.

A conviction that AI developments and electric vehicles will boost demand for power prompted Harnisch to start buying up utilities in March – including NextEra Energy and Southern Co — and power producers, which represent just 3% of the S&P500, now make up roughly 15% of the firm’s long book.

Meanwhile, the fund’s net leverage — a measure of risk appetite that takes into account long versus short positions — peaked near 50% earlier this year, but has since dropped to 36%, putting Harnisch at odds with many of his long-short equity peers. According to data compiled by Morgan Stanley’s prime brokerage unit, long-short funds last week boosted their equity exposure, driving net leverage to the highest level seen in more than two years.

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