Via Steven Drobny Drobny Capital, author of Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets H/T Mebane Faber Kyle Bass lived in relative obscurity until 2007, when he burst on the global hedge fund scene with a huge bet on subprime mortgages. Some might argue that outsized bets befit his Texan origins. But everything Bass does seems larger than life and goes against the conventional tide.
Kyle Bass’ history
Kyle Bass is an outlier by any stretch of the imagination. Born in Miami, Florida, he was raised in Dallas, Texas and attended Texas Christian University in Fort Worth. Following a brief stint at Prudential Securities, he joined the Dallas office of Bear Stearns on the retail side of the business, not exactly the epicenter of global finance. Nevertheless, he became a senior managing director at 28, before leaving to run Legg Mason Inc (NYSE:LM)’s Dallas office.
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
It’s been an inside joke on Wall Street for years that getting assigned to do “equities in Dallas” was the most dreaded spot for anyone in an investment bank’s training program. But toiling away in Dallas, far from the bars of New York where everyone else was talking about their views and positions, gave Kyle Bass exactly the kind of removed perspective he needed in order to see what might be the biggest trade in history.
Fast-forward to today and few coming out of Harvard or Yale want to sign up for an investment bank training program in the first place. With the Volcker Rule and Dodd-Frank legislation, the free-wheeling days of yore are gone forever, and with them the entire model of investment banking has changed. Equities in Dallas, or more specifically, an institutional quality hedge fund in Dallas is indeed the place to be.
Kyle Bass’ best way to express trade
Kyle Bass started Hayman Capital Management in 2005, something he had planned from his early days in the business. Although at the time this surely must have seemed crazy, with hindsight his timing was impeccable, as a small, Dallas-based hedge fund proved the perfect vantage from which to see the world with perfect clarity. Early in his career, Bass focused across a range of products and instruments – not just equities – looking up and down company capital structures to determine the best way to express trades. His trades ranged from highly liquid expressions to more special situations, all of which were impacted by broader macro forces.
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While waiting for the new book make sure to check out Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets