Ten Hut! Former-Marine Launches Long/Short Hedge Fund

Jan 28 2009 | 12:19pm ET

Wesley Gray, a former U.S. Marine Corps intelligence officer in Iraq and founder of Lewes, Del.-based Empirical Finance, has launched his maiden hedge fund.

Gray’s Empirical Search Strategies debuted in September with seed capital from an investor who is “testing” the strategy until Dec. 31, 2009. The investor will then decide whether to make a larger allocation, according to Gray. Since inception, the fund is down 12.56%, while the Russell 2000 Index fell more than 39% during the same period.

The former-leatherneck, who is also currently completing his Ph.D. at the University of Chicago’s Booth School of Business, said the fund is a long-biased micro-cap equity strategy. It screens stocks using a proprietary algorithm, narrowing its investment universe to some 75 names, and performs fundamental analysis on those finalists.

Currently, the fund is 90% invested long, with most of those investments in special situations opportunities such as liquidations and companies selling for less than cash value.

“We are essentially playing it safe, protecting capital, and waiting for better opportunities,” said Gray, who is hoping to follow in the footsteps of another Chicago doc, AQR Capital founder Cliff Asness.

Gray said his time in the Marines Corps has sharpened his analytical skills and thickened his skin against the adversities faced by rookie hedgies.

“The U.S. government spent a lot of money teaching me skills that allow me to analyze multiple sources of data and synthesize it into a coherent and behavioral bias-free thesis,” Gray said. “I also had the opportunity to embed with the Iraqi army and dodge AK-47 rounds for a while, so that makes it easier to deal with the adversity we face in the market or our fledging investment management business.”


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.