Kyle Bass

J. Kyle Bass is an American investor and founder of Conservation Equity Management, a Texas-based private equity firm focused on environmental sustainability.

He is also the founder and principal of Hayman Capital Management, L.P., a Dallas-based hedge fund focused on global events.

Bass attended Texas Christian University on an academic and Division I diving scholarship, and was a member of the Kappa Sigma fraternity at the university from 1989 to 1991.

Bass worked as a stockbroker in the Dallas office of Bear Stearns in the 1990s.

He identified stocks that appeared to be overvalued or fraudulent from East German shipyards to Texas mortgage lenders.

Once he had enough to launch his fund, he started making bets against subprime mortgage.

In 1992, he graduated with honors, earning a B.B.A. in finance with a concentration in real estate.

In 2001, he joined Legg Mason, signing a five-year deal to form the firm's first institutional equity office in Texas.

There, he advised hedge funds and other institutional clients on special situation investment strategies.

Before founding Hayman Capital Management in 2005, Bass briefly worked at Prudential Securities from 1992 to 1994 before joining Bear Stearns in 1994.

At Bear Stearns, he rose through the ranks rapidly, becoming a senior managing director at the age of 28 – among the youngest in the firm's history to carry such a title.

In December 2005, when Legg Mason sold the portion of the business where he worked, Bass left Legg Mason and started Hayman Capital Management to serve as the investment manager to a "global special situations" hedge fund that he planned to launch.

Bass launched Hayman Capital Management, L.P., with $33 million in assets under management – $5 million he had saved on his own and the balance he had raised from outside investors.

In 2007, Bass testified as an expert witness before the U.S. House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises.

During his testimony, he addressed: i) the role of credit rating agencies in the structured finance market and ii) policy measures that could be taken to minimize inherent conflicts of interest between rating agencies and issuers.

The flagship fund had a successful year in 2007 and gained 212% based on the subprime mortgage meltdown bet that brought fame to Bass.

Apart from predicting the housing bust in 2007, Kyle called Greece's economic woes and the devaluation of the Japanese yen a few years later.

He later profited from the call that the Japanese yen would fall with a projected round of monetary stimulus by the Bank of Japan.

Bass' first Asia-focused fund was the Japan Macro Opportunities Fund.

In 2008, Bass successfully predicted and effectively bet against the U.S. subprime mortgage crisis by purchasing credit default swaps on subprime securities, which, in turn, increased in value when the real estate bubble burst.

As a manager of the Coalition for Affordable Drugs (CFAD), Bass challenged the validity of 28 pharmaceutical corporations' patents via inter partes review, claiming that he wanted to invalidate weak patents imposing costs on consumers, thus making drugs covered by those patents more affordable.

The drug companies targeted by Bass allege that the sole purpose of the validity challenges was to allow Bass to short the market, thereby profiting from the change in companies' stock prices.

However, at least one event study indicates that if Bass had in fact pursued such a strategy, he could not have profited, because his "petitions for inter partes review ... did not consistently produce statistically significant negative returns in the patent holders' share prices."

The drug patent challenge campaign fizzled after several legal setbacks.

From 2008 to mid-2015, the flagship fund experienced a modest annualized performance of 1.56%.

In 2010, Bass testified before the Financial Crisis Inquiry Commission.

During his testimony, he addressed his analysis of the factors that caused the crisis.

From August 2010 to May 2019, Bass was a member of the Board of Directors of the University of Texas/Texas A&M Investment Management Company (UTIMCO), an endowment fund for Texas public universities.

The fund also gained 16% in 2012 based on Greek debt bets.

The long-term performance of Hayman Captal's flagship fund is described by the New York Post as "small caliber."

This fund returned capital to investors after the Japanese yen depreciated 40% from 2012 to 2015.

In 2016, he had a knockout with Hayman Capital's Master Fund finishing the year with an estimated net performance of 24.83%.

Bass was the recipient of the 2019 Foreign Policy Association Medal for his responsible internationalism.

Bass is a lifetime member of the Council on Foreign Relations and a founding member of the Committee on the Present Danger (China).

He is on the advisory board of the China Center at the Hudson Institute, executive advisory board of the George W. Bush Presidential Center, and the investment advisory board member to NewEdge Wealth.

Bass is also a boardmember of the Texas Department of Public Safety Foundation, the Texas Wildlife Association Foundation (TWAF), and The Quad Fund.

On June 14, 2020, the Wall Street Journal reported that Bass is facing regulatory scrutiny from SEC investigators for potential market manipulation—an issue that appears to stem from a controversial trade, executed in late-2015, in which Bass' fund built a short position against the stock price of a publicly traded REIT known as UDF, then accused the REIT of being a Ponzi scheme.

The REIT executives were convicted and sentenced to a combined 20 years in federal prison.

Bass was born in Miami, Florida, where his father managed the Fontainebleau Hotel.

His father later moved the family to Dallas, Texas, where he managed the Dallas Convention and Visitors Bureau.