Cedar Grove Capital Reports Steep Losses in Q1 2026 Investor Letter

Cedar Grove Capital Management, an investment advisor based in Michigan, has disclosed substantial losses in its first quarter 2026 investor letter. The firm's Multi-Strategy Composite has struggled to find footing, posting a net return of -23.0% since its inception. This figure highlights a stark divergence from broader market trends during the same period. When measured against industry benchmarks, the fund's underperformance is pronounced. The S&P 500, Russell 2000, and Russell Microcap indices all posted losses ranging from -5.5% to -5.9%, meaning Cedar Grove's losses were nearly four times greater than those of the benchmark indices. While the overall composite is down, the firm's strategy included a targeted short position in Hims & Hers Health (HIMS). The disclosure provides a glimpse into the volatility facing boutique investment managers attempting to navigate current market conditions through aggressive shorting and multi-strategy mandates. The report underscores the difficulty of generating alpha in the current environment, as the firm's net returns failed to keep pace with even the declining performance of the small-cap and micro-cap markets.