Big Mouth, Bigger Returns

In the last decade, Adam Wyden made his investors 11 times richer, pocketing $100 million for himself.

His biggest worry? That his father, Oregon Senator Ron Wyden, will tax his gains to death.

In the last ten years, hedge fund investor ADAM WYDEN made his investors 11 times richer, and made $100 million for himself, by uncovering hidden stock gems. His biggest worry? That his father, Oregon Senator Ron Wyden, will tax his gains to death.

From the sun-drenched house he’s renting in the ritzy Miami enclave of Bay Harbor Island, Adam Wyden is livid at the news crossing his Bloomberg terminal. It’s April 22, and markets are sinking on a report that President Biden aims to raise capital-gains tax rates to 39.6% for high earners, effectively doubling the rate for rich investors.

“It’s anti-American!” Wyden bellows. “I’m very disappointed with American governance right now. Do you think any of these guys actually know what they’re doing?”

For an answer, Wyden could ask his father, Senator Ron Wyden, a Democrat from Oregon and chairman of the powerful Senate Finance Committee. The elder Wyden is a tax-the-rich champion who dubbed former President Trump’s corporate tax cuts a “partisan tax scam.” His son, by contrast, isn’t registered with either political party but is instead a card-carrying member of the Benjamin Graham party, with a dogged devotion to finding undervalued stocks. And his record to date has been nothing short of staggering.

Over the past decade, the younger Wyden, 37, has grown his bar mitzvah money and personal savings into a $350 million hedge fund in which his share is now worth $100 million. Through his Miami-based ADW Capital Partners, Wyden has proven his mettle as a deep value investor buying companies full of underappreciated assets. He hunts far from the picked-over S&P 500, preferring micro- and small-cap stocks mostly ignored by analysts and large hedge funds. Since inception in January 2011, Wyden’s ADW has returned nearly 28% annualized after fees, roughly double the S&P 500, making investors about 11 times their money in a decade.

Wyden is no shrinking violet when it comes to making big bets. His fund is the single largest shareholder in Houston’s RCI Hospitality, operator of over 40 gentlemen’s clubs and parent company of Rick’s Cabaret. Wyden built his 10% position beginning in late April 2020, when the coronavirus led investors to believe that in a world of masks and social distancing, a company built on drunken bachelor parties and lap dances was toast. But Wyden reckoned that as the pandemic ebbed there would be pent-up demand for RCI’s clubs, many located in Florida and Texas, and that they would reopen fast. Another plus: It’s exceedingly difficult to obtain a strip club license, meaning the company has a deep moat around its business.

RCI shares have increased fivefold since Wyden invested. Other recent winners include PAR Technology, which sells cash-register software to restaurants, waste-management company GFL Environmental and construction conglomerate API Group,