Hiddenite Capital Partners capped off its second consecutive year of triple digit gains in 2025, delivering a 102 percent net return despite a weak finish to the year. The long-short fund, headed by Ryan Packard, once an Institutional Investor Hedge Fund Rising Star, surged nearly 120 percent in 2024.
Hiddenite declined to comment on its performance.
The hedge fund, which currently manages $400 million, mostly emphasizes old-economy stocks in industrials and materials, energy, financials, and technology. It takes a multisecurity approach — investing in equities, credit, and options — which it believes differentiates it from peers. The hedge fund uses options to defend the downside and amplify the upside. Packard tells clients that the firm’s ability to buy single-name core positions in equities and then a further 100 basis points of longer-dated call options has impacted results over time.
In 2025, roughly 70 percent of net gain came from equities, 20 percent from options, and 10 percent from credit, according to an investor. Forty-two names each contributed more than 100 basis points to performance, and ten added more than 450 basis points apiece, an investor says. Even excluding the top ten, Hiddenite’s portfolio outperformed the S&P500 in 2025. Altogether, the firm has compounded at more than 30 percent per year since its 2020 inception.
In its third-quarter letter, Hiddenite explained the role options play in the portfolio, stressing that this exposure is opportunistic: “We invest in options when options risk affords us an asymmetric way to amplify returns on our core cash equity investments,” it said. “Once an idea passes to the portfolio management stage, we focus on security selection, evaluating the best risk-adjusted way to express our investment view considering price target, timing, forecasted events, and technical set-up, to name a few. When we choose to own both cash equity and options on a name, we do so because that mix of securities appears to afford Hiddenite the greatest upside capture while limiting our downside.”
It said it typically spends 25 to 100 basis points of premium at cost for medium- to long-dated equity call options that it manages alongside the cash position as it waits for its fundamental thesis to play out. “Our investments in equity call options as a means to amplify returns while protecting capital is important to Hiddenite’s portfolio construction and risk management practices and to understanding the Fund’s performance,” it noted.
Heading into January, Hiddenite was more bullish on equities in general than at the end of the third quarter. Specifically, it turned bearish on the U.S. but was bullish on the rest of the world. For example, the hedge fund’s overall net equity exposure was 57.18 percent, according to the December monthly tear sheet. Equities accounted for nearly 48 percentage points and options 9.3 percent. Net exposure to credit was just 0.8 percent.
Hiddenite had 36 long equity positions and 81 shorts. Its options book (calls versus puts) had 22 long positions and four shorts. Credit had eight longs and four shorts. At the end of the third quarter, the equity book was just 21.3 percent net long, with equities accounting for two-thirds of the exposure. Credit was a just over 5 percent net long.
Significantly, at year-end Hiddenite had a 47.4 percent net long exposure to Europe and a 22.3 percent net long exposure to Asia, but an 11.7 percent net short exposure to North America. This is a sharp contrast from the previous quarter, when it was 22.2 percent net long North America and just 3 percent net long Europe and 2.4 percent net long Asia.
At year-end, Hiddenite’s five largest longs made up about 31 percent of capital. Little surprise four of those five stocks are in companies based outside the U.S. The five longs were Danish wind turbine manufacturer Vestas Wind Systems, Irish building materials company CRH, Taiwanese cloud infrastructure products provider Wiwynn Corp., mechanical and electrical contracting services company Comfort Systems USA, and German energy giant Siemens Energy. Of these, only Comfort Systems was a top-five long at the end of the third quarter.
