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Deep Sail Capital Partners’ fund gains 41.6% in Q2 on high exposure

Deep Sail reported Q2 net returns of 41.6%, with an 88% average net long exposure, and highlighted Credo Technology as a major contributor.

Wednesday, July 22, 2026 · Written up by our desk · Fund Industry

Deep Sail Capital Partners, an investment management company, reported its first-quarter 2026 investor letter and said its fund significantly outperformed both of its benchmarks in the second quarter, the Russell 2000 Mid Cap Growth Index and the Russell 2000 Index. In Q2, the fund returned 41.6% net of fees while averaging 88% net long exposure. Year to date, it returned 16.5% net of fees, with the long portfolio significantly outpacing the benchmarks and the short portfolio described as mixed during the quarter. The letter attributes much of the quarter’s performance push to factors that included the Iran War and idiosyncratic impacts on positions. It also pointed to what it called large reversals from the end of Q1, including Credo Technology Group Holding Ltd, which it described as a key contributor in Q2. Credo Technology Group Holding Ltd, a semiconductor company focused on high-speed connectivity solutions for optical and electrical Ethernet and PCIe applications, closed at $223.87 per share on July 21, 2026. Yahoo Finance also cited that the stock gained 127.49% over the past 52 weeks and that it returned 191% in Q2, with the fund noting Credo’s ZeroFlap optics platform and its acquisition of Dust Photonics as part of the renewed outlook.

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