San Francisco based Honest Capital was set up by Shawn Badlani, a veteran portfolio manager who cut his teeth as Partner and PM at Marcato Capital Management and before that at Canyon Capital Advisors and The Blackstone Group. At Blackstone, Badlani and his team worked closely with Bill Ackman on some of Pershing Square’s earliest activist investments (2004-2006).
Later at Canyon Capital, Badlani honed his credit skills and got trained to focus on downside protection.
Shawn founded Honest Capital in 2020 as a concentrated, long-term, long-biased investor in high quality North American small and mid-cap equities. His early returns have been impressive with an 88.4% return net of fees in 2020, and additional strong returns in 2021 to date. Shawn takes concentrated positions in less-followed small and mid-cap companies and runs a liquid, transparent, tax-efficient public equity strategy, in an effort to compound capital at high rates of return over a long-term horizon.
Based on his unique skillset (equity selection and credit analysis), Shawn at times also engages constructively with company boards and managements team to unlock shareholder value from behind the scenes “in a friendly manner through logic and analysis, and then let them take the credit for it. That just works better for everybody.”
Watch the video and learn more about:
- Badlani’s three pillars for outperformance
- Screening Process & Timing: How to define and find “high quality companies”? Which patterns can cause high quality companies to sell in the market at a discount?
- Why Badlani is “always” looking at corporate events and special situations
- Badlani’s “Hidden Asset Value” and “Sum-of-the-Parts” strategies
- Time Horizon Arbitrage: The Rewards of Being Long-Term
- Lesser cases, but high value creation: Friendly Activism. Case Study: Chatham Lodging Trust (CLDT)
- Why Badlani chose Honest Capital as firm name
Before starting the Honest Capital in 2020, Shawn Badlani spent almost a decade as a Partner and Portfolio Manager at Marcato Capital Management in San Francisco, a mid-cap, concentrated, value-focused activist hedge fund with $3 billion of assets under management at its peak. Before that, he was an investment analyst at Canyon Capital Advisors, a multi-strategy, credit-focused, value hedge fund based in Los Angeles, with ~$10 billion of assets under management at the time.
Badlani started his career as an investment banking analyst in the mergers & acquisitions advisory practice of The Blackstone Group. He received an MBA from Harvard Business School (2010) and an AB in economics, cum laude, from Harvard College (2004).
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San Francisco based Honest Capital was set up by Shawn Badlani, a veteran portfolio manager who cut his teeth as Partner and PM at Marcato Capital Management and before that at Canyon Capital Advisors and The Blackstone Group. At Blackstone, Badlani and his team worked closely with Bill Ackman on some of Pershing Square’s earliest activist investments (2004-2006).
Later at Canyon Capital, Badlani honed his credit skills and got trained to focus on downside protection.
Shawn founded Honest Capital i ...more
