Feb
27
“I do serious research. I will pay someone to stake out a factory in China and count the trucks going in and out. I talk to suppliers and customers. And by and large almost all of that research is no good for finding longs. You see the PE shops have more resources than me - and when they find something even half way good they issue low yield debt and buy it. The low yield debt that is everywhere is my competition - and I hate competing with someone whose capital costs less than a third of the returns I target. The low yields that PE funds can issue debt have now resulted in low ex-ante returns for small cap investors.”
Bronte Capital: A small hedge fund manager’s lament
