(Bloomberg) -- Formidable Asset Management LLC, which took an early position in electric-vehicle maker Workhorse Group Inc., rallied about 25% in June and beat the S&P 500, which was up about 2% in the same month.
The main contributor to the fund’s June performance was the position in Workhorse, according to a letter seen by Bloomberg. The fund revealed its stake on June 19, when the stock was around $5 per share. It surged 600% in the month of June. Since then, Workhorse has fallen about 25% so far in July.
The hedge fund mitigated some of its risk in Workhorse by holding put options on its competitor Nikola Corp., citing its unfavorable risk-reward. Nikola rose 135% in June, while falling about 35% since the start of July. A position in Boeing Co., which has since been closed, also helped the fund in June, according to the letter.
Formidable is headed by chief executive officer and managing partner Will Brown, who previously served as managing partner of BBK Capital Partners and as senior vice president at Raymond James. The chief investment officer is Adam Eagleston, formerly a portfolio manager at Driehaus Capital Management LLC.
The Cincinnati-based fund was up 34% in the second quarter, outperforming the 21% total return in the S&P 500 in the same period. It climbed about 73% year-to-date versus a 3.1% total decline in S&P 500 as of the end of June, according to a letter seen by Bloomberg.
The performance of the fund came during a month when hedge funds as a group gained about 1.4%, and during a first half when they fell 3.5%, according to preliminary figures from the Bloomberg Hedge Fund Indices. Bloomberg Hedge Fund Indices are based on funds reporting to the Bloomberg Hedge Fund Database.
Meanwhile, other trades for Formidable fund included going long Allegiant Travel Co. and short American Airlines Group Inc., biotech and entertainment leveraged debt deals, and a position in gold.
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