Other People's Money with Max Wiethe
Why Hedge Fund Managers Must Adapt or Die | Kyle Mowery on The Future of Small Cap Value
Jan 14, 2025
Kyle Mowery, Portfolio Manager and Founder of Grizzly Rock Capital, dives into the challenges facing hedge fund managers in today’s volatile market. He discusses how small/mid-cap value investors must adapt their strategies to keep pace with changing investor demands. Mowery emphasizes the importance of clear communication and setting realistic expectations. He also shares insights on the advantages of collaborating within a pod versus launching solo and outlines what he would do differently if starting Grizzly Rock today, highlighting the need for adaptability.
52:35
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Quick takeaways
- Kyle Mowry emphasizes the necessity for hedge fund managers to adapt their strategies to align with evolving market dynamics and investor expectations.
- The discussion underscores the importance of transparent communication between fund managers and investors to foster trust and understanding regarding investment strategies and risk management.
Deep dives
Fund Strategy Considerations
The discussion highlights the complexities of fund strategy in the current investment management landscape, particularly the challenges faced by Grizzly Rock Capital's long/short fund approach. Kyle Mowry notes that allocators are increasingly favoring strategies that either minimize net exposure or provide significant returns aligned with market indices, creating a bifurcated industry. He suggests that the fund's current net exposure of approximately 40% may not align with what allocators are seeking, leading to difficulties in attracting investment. The importance of understanding one's skill set and aligning it with the preferences of allocators is emphasized as crucial for success.
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