Investing With Discipline in an Uncertain Market

Why Hedge Funds Exist — and How Vayssie Capital Thinks About Capital

Vayssie Capital Partners was founded with a long view of capital — one shaped by history, discipline, and respect for risk.

In 1887, my great-grandfather immigrated from France to San Francisco. Like many immigrants of that era, wealth was not built through speculation or shortcuts, but through patience, restraint, and long-term stewardship. Capital mattered because it was hard-earned.

More than a century later, those same principles guide how we think about investing.

Today’s market environment makes that mindset more relevant than ever.

The Market Environment Has Changed

Markets today are more complex than the traditional narratives many investors grew up with.

We are navigating an environment defined by:

• Uneven economic growth

• Shifting interest-rate regimes

• Elevated volatility across asset classes

• Wide dispersion between winners and losers

Professional market outlooks increasingly emphasize a simple truth: returns are no longer evenly distributed, and broad exposure alone may not adequately manage risk.

In this kind of environment, flexibility and risk control matter more than predictions.

What a Hedge Fund Actually Is

A hedge fund is not a shortcut to higher returns, nor is it inherently more risky than other investments.

At its core, a hedge fund is a privately structured investment vehicle designed for investors who understand complexity and long-term decision-making. Unlike traditional mutual funds or ETFs, hedge funds are not constrained to:

• Long-only positions

• Static allocations

• Benchmark tracking

Instead, hedge funds are built to adapt.

They can hedge risk, adjust exposure dynamically, and seek opportunity across market conditions — not just when markets are rising.

Why Hedge Funds Matter in This Environment

1. Markets Are Increasingly Dispersed

Today, not all assets move together. Even within the same sector, outcomes can differ dramatically.

This dispersion creates opportunity — but only for strategies capable of identifying relative value and managing downside risk. Hedge funds are designed for exactly this type of market.

2. Risk Management Is the Foundation

One of the most misunderstood aspects of hedge funds is risk.

At Vayssie Capital, risk is not something to be minimized through optimism — it is something to be acknowledged, measured, and managed. That includes:

• Defined position sizing

• Exposure limits

• Portfolio diversification

• Ongoing drawdown awareness

The objective is not to avoid risk entirely — that’s impossible — but to ensure risk is intentional and controlled.

3. Flexibility Across Market Cycles

Traditional portfolios often struggle when markets move sideways, transition between regimes, or experience volatility.

Hedge funds, by design, are not dependent on a single outcome. They can reduce exposure when conditions warrant, hedge uncertainty, and reposition as the environment evolves.

That flexibility is not about trading more — it’s about reacting less emotionally.

Who Hedge Funds Are (and Aren’t) For

Hedge funds are intentionally limited to accredited investors for a reason.

They often involve:

• Longer time horizons

• Less frequent liquidity

• Greater structural complexity

These trade-offs allow managers to focus on process rather than short-term performance pressure. For investors seeking simplicity or daily liquidity, hedge funds may not be appropriate.

For those who value discipline, patience, and thoughtful capital allocation, they can be.

Alignment and Stewardship

One defining characteristic of hedge funds is alignment.

At Vayssie Capital, the philosophy is simple: capital should be treated with respect. Decisions are process-driven, not reactive. The focus is on consistency across cycles, not momentary outcomes.

That mindset is inherited — not engineered.

Hedge Funds as Part of a Broader Portfolio

Hedge funds are not replacements for traditional investments. They are complements.

When used thoughtfully, they can:

• Reduce reliance on market direction

• Add diversification beyond stocks and bonds

• Help manage portfolio volatility

• Provide exposure to alternative sources of return

In uncertain economic environments, this diversification can be especially valuable.

A Long-Term View

Markets will change. Volatility will return in cycles. Economic narratives will shift.

What endures is a disciplined approach to capital — one that prioritizes risk awareness, adaptability, and long-term thinking over short-term noise.

That philosophy has endured in my family since 1887. It is the foundation of Vayssie Capital today.

This publication is for educational purposes only and does not constitute an offer to sell or a solicitation to buy any securities. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.