Hedge funds

Update on Jordan McNamee of The Optimist Fund

A hedge fund that was up 80%+ in 2023.
OPM 2 min read

BTW, I did not know hedge fund Traynor Ridge until the OSC revealed it blew up and its PM had died. Still, I think there’s a useful lesson in that story and I resolve to be more presidential in the future, similar to how Trump changed after he won the White House (the first time).

Most notable performance of the year

If I don’t encourage young managers now, who will I mock in 10 years? With that in mind, I am naming Jordan McNamee this year’s Manager of the Decade. He manages The Optimist Fund. Last year, the fund was up more than 80%. The official spin is that the fund has a “growth-oriented value” approach. I think it would be better described as a venture growth approach to the public markets. I would also call it a “power law” fund: a few mega winners could generate all the returns even if most other picks are clunkers. At least, he has a differentiated strategy. But will he have staying power? Hugh Cleland had a similar high torque strategy, but he did not manage to keep his clients.

I mentioned previously The Optimist Fund was down 51.4% in 2022. Jordan is a young manager with a few millions raised from his friends and family. In my defence, I was actually poking fun at the parent company that sponsors the fund, BloombergSen. Jordan was just collateral damage in that effort. He takes concentrated positions in businesses that have traction, but not necessarily a proven history of profitability. Companies like Wayfair, Uber, DoorDash, Peloton and Carvana. Numerate as you are, you will know that being down 50% and up 80%, means he has yet to fully dig himself out of a hole, but it’s a start. His AUM is getting closer to $10m. He’s available on Fundserv (under code BBG600E).

There are now many emerging managers in Canada, some with great pedigree. I plan to feature some of them and generally tighten my focus on the money management industry. I don’t know if I will evolve from being a troll. But I hope you will remember that everything in life is a tradeoff. By spreading the Joy of Schadenfreude™, I have saved millions of lives from depression and the brink of suicide.

You can read my old article on Lawrence Bloomberg and BloombergSen here. BloombergSen was up 6.5% to the end of November and compounding at around 2% for the past 5 years. More downside capture than upside. Yet it still has close to $2B AUM. My work is far from done.

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