The Class F Lead Series of the Multi Strategy LP returned 1.73% in November, while the Class F Lead Series of the Long Short LP returned 1.22%, both net of fees. The difference between the two is largely reflected by higher relative exposure levels in the Long Short LP, offset by positive performance from credit strategies in the Multi Strategy LP. Beta-adjusted net equity exposure was 64% in the Multi Strategy LP and 52% in the Long Short LP. Net credit exposure was 31% in the Multi Strategy LP and remained at 0% for our Long Short LP. Beta-adjusted net equity exposure was approximately 9% and 18% higher in each respective fund since October month-end. The increase in net equity exposure was driven by increases in conviction long positions and lower deltas on equity index put options. Net equity exposure was highest in the Technology, Consumer and Industrial sectors.
After a mid-month downdraft in markets, results from the Q3 reporting slate drove stocks higher for the month overall. S&P 500 Q3 EPS growth is tracking at 8% year-over-year (“YoY”) versus consensus expectations of 6% at the start of earnings season. While positive, the outperformance of S&P 500 EPS growth relative to expectations is at the lowest level over the past four quarters. This fact strikes us as notable, given that consensus expects S&P 500 EPS YoY growth to almost double by Q3 2026 to ~15%. Since the start of the earnings season, the consensus estimate for 2026 EPS has been revised higher by 2% and now sits at ~$308, resulting in a 2026 P/E of 21.9x.
Optimistic that growth will remain decent and multiple rate cuts are still to come, equity markets posted strong results for September 2025. As can be seen in the graph below, estimates for both GDP growth (white line) and inflation (yellow line) in the U.S. have been steadily inching higher. Just as tariff-related inflation, actual or assumed, doesn’t seem to matter to markets, neither do the facts that AI-driven capex and spending by the top decile of the population account for almost all economic growth. As the market dynamo Prince once sang, markets just want to “party like it’s 1999”!
In August, equities once again followed the rule of ‘don’t fight the Fed’. Ahead of Chair Powell’s Jackson Hole speech on August 22nd, markets, not the Fed, were pricing in multiple rate cuts. That optimism for easier policy, despite a still resilient economy, drove cyclical stocks to outperform defensives (white line) relative to the expected December 2026 Fed Funds rate (red line).