Monetary Matters with Jack Farley How This Value Investor Beat the Market and Grew His Hedge Fund | Yaron Naymark | 1 Main Capital
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Dec 17, 2025 
Yaron Naymark, founder of the concentrated hedge fund 1 Main Capital, shares his journey from launching with $1M to achieving $80M AUM. He discusses the significance of transparent communication with investors and how a strategic $20M investment from Cannell Capital accelerated growth. Yaron explains his Buffett-style investment philosophy, emphasizing concentration and risk management. He reflects on the challenges of scaling a fund and the importance of aligning incentives with institutional investors, offering valuable insights into the hedge fund world.
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Set A Simple Annual Hurdle
- Use a modest annual hurdle (he uses 5%) to align incentives and avoid encouraging risk-taking to chase carry.
- Prefer an annual hurdle versus compounding to prevent risky behavior when underwater.
Avoid Permanent Leverage
- Avoid portfolio and balance-sheet leverage to prevent forced selling during market stress.
- If needed briefly, use covered calls or transient margin for operational reasons but keep permanent leverage minimal.
Institutional Allocation Is Biased Toward Safety
- Allocators struggle to identify real manager skill and face agency pressures that favor safe, large funds.
- Committees and career risk push allocators toward big-name managers even when those underperform.