Arquitos Capital Partners has reported exceptional performance for 2025, with the investment management firm delivering an 82.1% net return to investors. The fund significantly outperformed the Russell 2000 index, which gained 12.8% during the same period, according to the firm’s fourth quarter investor letter released recently. Among the fund’s standout positions, Liquidia Corporation emerged as the largest contributor to the portfolio’s impressive annual gains.
According to the investor letter, Liquidia Corporation shares climbed from $11.76 at the beginning of 2025 to $34.49 by year-end. As of February 13, 2026, the biopharmaceutical stock was trading at approximately $39.04 per share, representing a market capitalization of about $3.483 billion. Arquitos Capital Partners noted that the firm primarily holds long-dated call options in the position that are currently in the money.
Arquitos Capital Partners Strategy Drives Outperformance
The investment firm attributed its exceptional returns to company-specific factors rather than broader economic trends. Arquitos emphasized that its concentrated approach, centered on top portfolio positions and disciplined risk management, proved particularly effective amid heightened market dispersion. The fund’s strategy focused on identifying undervalued opportunities while maintaining strict position sizing and risk controls.
Meanwhile, the investment manager observed that market conditions throughout 2025 became increasingly selective. Capital flowed predominantly toward established, cash-generating businesses, while smaller and less liquid growth companies experienced significant volatility. This shift in investor preferences particularly affected mid-cap and small-cap equities, creating challenges for momentum-driven strategies.
Liquidia Corporation Performance and Market Position
Liquidia Corporation specializes in developing and commercializing innovative therapies for patients with rare cardiopulmonary diseases using its proprietary drug delivery technology platform. The biopharmaceutical company’s shares have traded in a range between $11.26 and $46.67 over the past 52 weeks, demonstrating substantial volatility that created opportunities for skilled investors. The one-month return for Liquidia Corporation stock stood at 5.56%, according to recent market data.
However, hedge fund sentiment toward the biopharmaceutical stock showed slight moderation in recent quarters. According to database tracking, 42 hedge fund portfolios held Liquidia Corporation at the end of the third quarter, down from 43 in the previous quarter. Despite remaining a favored position among select investment managers, the stock does not appear on lists of the most widely held hedge fund positions.
Investment Management Firm Navigates Market Volatility
Arquitos Capital Partners noted that fading momentum in prior market outperformers created additional challenges during the reporting period. Nevertheless, the firm’s concentrated portfolio approach and emphasis on deep fundamental research helped navigate these shifting dynamics. The investment manager’s use of options strategies, particularly long-dated call options, provided additional leverage to capitalize on significant price movements in core holdings.
Additionally, the firm’s focus on risk management became increasingly important as market dispersion widened throughout the year. The investment approach favored high-conviction positions where the management team identified significant fundamental value or catalysts, rather than attempting to capture broad market moves. This selective strategy proved particularly beneficial in an environment where individual stock selection mattered more than sector or style allocations.
In contrast to diversified index approaches, Arquitos Capital Partners’ concentrated portfolio exposed investors to greater individual position risk while potentially offering higher returns. The success of positions like Liquidia Corporation demonstrated how this approach can generate substantial alpha when thesis development and timing align favorably. The firm’s willingness to utilize derivative instruments also provided additional tools for expressing investment views with defined risk parameters.
Looking ahead, investors will monitor whether Arquitos Capital Partners can sustain its exceptional performance trajectory and how the firm adjusts its portfolio positioning amid evolving market conditions. The investment management firm has not publicly disclosed specific outlook commentary or planned portfolio adjustments for 2026.
