Nantahala Capital was founded in 2004 by Wil Harkey, and three years later he was joined by former college Dan Mack. Two former analysts from Sagamore Hill Capital, the duo apparently “discovered a common affinity not only for the quantitative aspects of making relative-value bets between securities but also for understanding the fundamental reasons mispricings occurred,” according to a 2009 interview in Value Investor Insight.
The hedge fund combines a traditional Ben Graham value approach with “an arbitrageur’s mindset for isolating and offsetting risk.” Simply put, the duo are looking to isolate what they find attractive about each opportunity and use hedges to ensure they’re only exposed to the mispriced factor.
This strategy proved extremely lucrative at first with the fund achieving...
Login required to continue reading.
Setup a free account to get access to this article (no credit card required).
View Full Article
