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: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

New customer protection rules have landed: Are you ready?

The twin debacles of MF Global and PFG have damaged the reputation of the futures industry demanding an examination of customer protection rules. New rules are being implemented, which will add cost a...

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.