Gate City Uses Small Town Values To Consistently Win In Microcap Space

Oh, how a rough beta market environment can impact hedge fund returns.

Interview with Gate City Capital

Last fall as he was wrapping up his third-quarter letter to investors, Michael Melby, founder and portfolio manager of Gate City Capital, was eying another year in which the microcap focused strategy was on track to deliver positive results. For Gate City, beating the Russell Microcap index and delivering positive year-end results had become somewhat of a consistent theme for the niche investment manager. And then December hit – hard.

Q3 hedge fund letters, conference, scoops etc

In a ValueWalk interview, Melby opens up about his investment process, his “margin of safety” and an investment methodology that had been delivering something rare among fund managers – consistent outperformance relative to a stock market index.