“Where Capitol Meets Conservation.” “Global Outlook. Contrarian Perspective.” Those statements serve as guideposts that headline the websites of two entities that J. Kyle Bass founded:
Conservation Equity Management (ecosystem-focused investment firm) and Hayman Capital Management (asset management firm).
A conversation with Bass elicits insights that seem to blend the firms’ philosophies into the way he approaches some of the world’s most significant challenges, while building a reputation as a leading hedge fund executive and prominent voice on financial news outlets.
Bass sees significant and meaningful intersections between investment appreciation potential with a commitment to protecting and enhancing the environment. And that sometimes means taking a stance on something that others may not share.
A capitalist, geopolitical expert, hedge fund guru, conservationist, and contrarian.
That’s our description. He described his outlook in a different way.
“Holy grail,” he told American Farmland while overseas in Paris, France, of his search for the optimal solution in challenging situations.
RELATED: Kyle Bass has praised some of President-elect Donald Trump’s cabinet choices. He thinks that Key Square Group LP founder Scott Bessent was the right pick for U.S. Treasury secretary as he told Bloomberg.
He also praised Trump’s selection of Florida Senator Marco Rubio for U.S. secretary of state and thinks that the president-elect is building a “war-time cabinet” as he told Yahoo Finance.
But Bass doesn’t think enough Americans view China as the threat that it is as he explained in this CNBC interview.
He keeps a focus on what is about to happen. Bass called out the subprime mortgage crisis before it collapsed in 2008 leading to the Great Recession. When others raced to invest in cryptocurrency in 2021, Bass resisted.
At the start of 2022, he looked at the rising interest rates and quantitative easing by the Federal Reserve Board and knew that it would be a tough year for returns on the stock market. Bass was right.
COVID-19 shook up the residential and commercial market. Some Americans found newfound freedom to work remotely. Others cherished more time with family and friends and explored nature and new experiences.
Bass was watching those migration trends. People were leaving more expensive, higher taxed communities in places like California and New York. Bass followed where the pattern led him. He bought up real estate in their preferred destinations: Florida, Texas, and Tennessee.
RELATED: Kyle Bass explained in this Dallas Morning News article the appeal of being at the forefront of real estate to take advantage of migration trends that emerged following the global pandemic.
Bass uses a similar philosophy with it comes to enhancing the value of timberland. “You might be able to do what we call ‘boutique forestry,’ pull a few trees out to allow the light to permeate the floor of the forest again,” he explained. “Run fires through it, which most almost never do. Do some controlled burning.”
It is part of what Bass considers a three-year process. “Bring in some bird boxes, some bat boxes. Bring some bees out there, and really raise the value of the of the ecosystem and the biodiversity level of those properties.”
That value-added focus, while still respecting the natural surroundings, also leads to a higher return, Bass said. “You might be able to buy timberland for 3,000 bucks an acre. You might be able to sell it for 7 or 8, or 9, or 10, if you do this properly.”
That land appreciation, he appreciates. What he doesn’t is what has happened to many other aspects of the U.S. economy after trillions of dollars of federal stimulus triggered an avalanche of inflation.
RELATED: Kyle Bass claims the federal government does not properly track the real level of inflation. Seeking Alpha followed his criticism in 2021 that true inflation was twice as high as reported. See that story here.
What has taken place over the past four or five years explains the significant disconnect between stock market returns and economists’ optimistic versus what consumers were living.
“If you're the average working-class family that has a small savings and is working to make ends meet, putting their kids in school, and everything that people do…they have been absolutely massacred by the inflation that the Fed and Congress just pushed at us,” Bass said.
“I think we've seen 50% inflation across the board in the last 4 years.”
J. Kyle Bass will be a keynote speaker at the 18th Annual Land Investment Expo in Des Moines, Iowa, on January 14th.
American Farmland Owner is a media sponsor of the event.
