Hedge Fund - ADW Capital

ADW Capital is based in Miami, Florida, and was founded in 2010 by Adam Wyden from the second floor of his mother’s basement with $400,000 in seed capital. According to Business Insider, the fund’s philosophy and structure are modeled on the investment partnership that Warren Buffett had before starting Berkshire Hathaway. According to the management, the fund aims to produce high risk-adjusted returns through “conservative equity investing” in lesser-known stocks in the U.S., Canada, and Western Europe. The fund became successful soon after its inception and returned 91.31% in its first year. From 2011 to 2021, the fund’s annualized rate of return was around 24%. 2020 was the most profitable year for ADW Capital, where it returned 119.2%. Conversely, the most significant loss for the fund occurred in 2018, which was 33%.

Adam Wyden is the son of renowned US senator Ron Wyden. He received his bachelor's in Economics from The Wharton School in 2006. Wyden later completed his MBA in Finance from Columbia Business School. Wyden started his career in 2005 as an intern research analyst at DE Shaw’s $700 million long-short tech group, where he worked for four months. After his internship, Wyden became a merchant banking analyst at SMH Capital till July 2008.

Wyden’s greatest inspiration is his grandmother, who was a great believer in blue-chip stocks. According to him, he learned compounded interest from her checkbook when he was young. He also mentioned that he tries to find ideas that he can explain to his 93-year-old Jewish grandmother. He was also inspired by his great-uncle, a well-known investor who taught him to invest with people “who have more to lose than you do”. He lives by the words “chance favors the prepared mind”.

Furthermore, Adam Wyden’s most significant investment philosophy was utilizing technology to find stocks that “nobody knows existed”. When it comes to investing in recessive market conditions, Wyden recalls his story of investing in penny stocks that were coming out right after the great financial crisis of 2008. He bought those stocks early for nearly a dollar and sold them all when they reached $6-$7.

Regarding position sizing, Adam Wyden believes in adding a higher concentration to his top stocks and giving single-digit concentration to the stock that he feels is mispriced and could later become remarkable.