Horizon Kinetics Goes Public
An Intellectual Royalty Business Invested In Royalties
In an age where most money managers chase benchmarks, fight with algorithms, and obsess over quarterly flows, Horizon Kinetics shuns the index and conventional wall st practices preferring to focus on investment themes born from their independent proprietary research.
Founded in 1994 by Murray Stahl, Steven Bregman, and Peter Doyle, the firm built its reputation on independent first principles thinking and deploying capital with an extended time horizon.
By side stepping Wall St’s obsession with the short-term focus that inevitably arises from fund managers and investment bankers being constrained to timeframes aligning with their bonus incentives the firm is free to fully dedicate itself to asset management rather than asset gathering.
In their own words:
While all acknowledge the tremendous power of compounding, practically speaking (and by definition) this benefit simply cannot be harnessed in a short time frame. Our investment strategies – supported entirely by our own independent, fundamental research – typically reflect contrarian views that seek to take advantage of the short-term focus of the marketplace.
-Horizonkinetics.com
Earlier this year, the firm quietly took an extraordinary step by publicly listing shares on the “pink sheets” or OTCPK via a reverse merger. As I long term follower of their work, I naturally bought shares in the new Horizon Kinetics Holding Corporation (HKHC).
Horizon Kinetics is no ordinary asset manager.
With roughly $10.5 billion under management, it has spent decades refining a contrarian investment style. Its founders were early to identify the risks of indexation and the distortions caused by passive fund flows, the power of financial exchanges in providing superior returns to underlying stock indices, the rise of bitcoin and cryptocurrencies as an asset class and, perhaps most importantly, their work on overlaying a hard asset interest with a capital-light business model completely changed my investment philosophy.
This last point has made such a profound impact that it could be said that the royalty king was born reading Horizon’s research papers.
Now, for the first time, investors can own a piece of the managing firm itself and benefit from the intellect of the capital allocators who’ve long bet against the prevailing orthodoxy and who’ve seen the big trends well in advance.
