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Arauca Capital exits Alphabet after derivative gains and risk shift
The fund cited Alphabet call exposure becoming a large synthetic holding as the stock moved above the call strike, and it said capital spending at Alphabet was accelerating.
Arauca Capital said it exited its Alphabet Inc, GOOG, exposure in its Q2 2026 investor letter, pointing to a change in the risk profile after derivative positions produced substantial unrealized gains.
According to the letter, Arauca had combined share exposure with a long-dated risk reversal, and as the shares rose above the call strike, the calls started behaving increasingly like a synthetic holding, leading to the decision to exit.
The investor letter said Alphabet’s operating results remained strong during the period, with Cloud growing more than 80% and Search up around 17%, but it also flagged that capital expenditure was accelerating sharply.
Arauca also said the fund holds substantial cash reserves and short-dated bonds, while noting that AI is enhancing operations, though adoption in larger institutions remains limited.