General Market Review
In June 2026, U.S. equity markets paused after two consecutive months of strong gains, with investors adopting a more cautious stance following the sharp rally experienced during April and May. While market sentiment remained broadly constructive, heightened volatility within the technology sector and growing uncertainty surrounding the outlook for interest rates moderated overall performance.
Geopolitical developments remained an important driver of market sentiment. The ceasefire between the United States and Iran was extended during June, contributing to a significant decline in oil prices and reducing concerns over potential disruptions to global energy supplies. Brent crude prices fell sharply during the month, helping to alleviate inflation pressures and supporting the broader economic outlook.
Investor enthusiasm surrounding artificial intelligence remained a key market theme, although leadership within the technology sector became more selective. Semiconductor companies continued to benefit from expectations of sustained AI-related investment, while some large-cap technology firms experienced profit-taking as investors reassessed the near-term returns from substantial AI infrastructure spending.
Economic data released during June suggested that the U.S. economy continued to expand, although signs of moderation in labor-market momentum emerged. Non-farm payrolls increased by 57k, below market expectations and prior months’ gains, while the unemployment rate edged down to 4.2%. The data pointed to a gradually cooling labor market rather than a significant deterioration in employment conditions.
Inflation remained elevated. Headline CPI increased from 3.8% to 4.2%, while measures of underlying inflation also remained above the Federal Reserve’s target, reinforcing expectations that policymakers would maintain a cautious approach toward monetary easing.
In fixed-income markets, government bond yields were mixed. While shorter-dated Treasury yields moved higher as investors adjusted expectations for future monetary policy, 10 year US treasuries remained nearly unchanged with a yield of 4.46% at month end, while 10 year German treasury yield decreased further by 8 bps to 2.86% at month end.
Global equity markets delivered mixed performance during June. The MSCI World Index declined by approximately -0.7% in U.S. dollar terms as weakness in U.S. mega-cap technology stocks offset gains in other regions and sectors, while the MSCI Europe Index gained by + 3,0% in Euro terms and thereby outperforming their U.S. counterpart., supported by improving economic sentiment, lower energy prices, and relatively attractive valuations.
Portfolio Management Report
Credit markets were mixed but remained resilient overall. US high-yield spreads widened by 13 basis points, while European high-yield spreads increased by 6 basis points. Despite the spread widening, total returns remained positive at +0.3% and +0.6%, respectively.
Nordic high yield posted another positive month in June, with the benchmark index returning +0.6%, bringing year-to-date gains to +3.8%. Performance continued to demonstrate relative stability compared to global equity markets, supported by strong carry, short duration, and limited sensitivity to movements in long-term interest rates. All major segments delivered positive returns, with Norwegian high yield, energy, and non-energy sectors each advancing by+ 0.6%.
Index spreads widened by 11 basis points during June, reaching 476 basis points. However, the majority of this increase was attributable to index rebalancing effects. Rebalancing accounted for approximately 7 basis points of the widening, implying that the underlying market repricing was closer to 4 basis points. This distinction is important when assessing market conditions. Within the index, Norwegian high-yield spreads widened by 14 basis points to 500 basis points, while energy spreads increased by 25 basis points to 387 basis points and non-energy spreads widened by 9 basis points to 498 basis points.
The Seahawk Credit Opportunities Fund delivered a solid performance in June, supported by its sector positioning, including a 24.3% allocation to exploration and production (E&P) and a 34.4% allocation to oilfield services. The EUR-S and USD-S share classes generated monthly returns of +0.2% and +0.3%, respectively. On a year-to-date basis, the share classes have returned +2.1% and +2.9%, significantly outperforming the broader US and European high-yield markets.
During the month, the Fund added new positions within both the E&P and oilfield services sectors. It also participated in Borr Drilling’s new issuance of Senior Secured 8.75% Notes due 2032. In total, Borr Drilling raised USD 1.6 billion through two senior secured bond tranches: USD 800 million of Senior Secured Notes due 2032 and USD 800 million of Senior Secured Notes due 2034. The proceeds will be used to (i) refinance existing debt, including the full redemption of the Senior Secured Notes due 2028 and the partial redemption of 50% of the Senior Secured Notes due 2030, (ii) reduce the company’s overall cost of debt, and (iii) establish a more sustainable amortization profile.
Key credit strengths of the transaction include the fact that the senior secured notes benefit from priority claims on 26 premium, high-specification jack-up rigs. Borr Drilling operates one of the youngest and most technically capable fleets among the world’s 15 largest jack-up rig owners and managers. Within the restricted group, gross and net secured debt per rig amount to approximately USD 76 million and USD 66 million, respectively—both below the acquisition price observed in most secondary market transactions over the past five years. Furthermore, the jack-up segment continues to represent the most liquid asset market within the offshore drilling industry.
Net leverage is expected to decline from an estimated 5.2x in 2Q26 to below 2.0x over the next three years. At issuance, gross loan-to-value (LTV) is projected to average approximately 59% at the restricted group level and 63% at the parent company level (59% on a net basis). This metric is expected to improve significantly, declining to approximately 37% by the first maturity date in 2032.
For more information, you can find our latest Factsheet– June 2026.
Seahawk Investments GmbH
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