The Redwood Fund gained +12.67% in June net of fees. For the first half of the year, the Fund gained +8.61% net of fees compared to the Nasdaq BANK index which fell -25.85%. First half gross contribution to Fund return was -3.36% from long investments and +11.03% from hedges.

To recap the 1H23 path, we began the year with cautious net long exposure of 30%. Throughout January and February the Fund pared long investments and added to hedges resulting in 0% net long exposure at the start of March. As the banking sector stress unfolded in the early Spring, the Fund closed hedges and added substantially to long investments. Our 1H23 net long exposure peaked May 11. Currently the fund holds 17 long investments most of which are in long term holdings that we view to have very attractive through cycle upside opportunities. Hedges remain modest as we see the intermediate time period still biased to sector recovery following……