Overview
Blue Grotto Capital, LLC (“Blue Grotto”, “we” and “us”) was founded in June 2018 by
Benjamin Gordon, the firm’s principal owner. Blue Grotto provides investment advisory
services to pooled investment vehicles, certain single-investor investment vehicles, and
separately managed accounts.
We seek to achieve high absolute returns on behalf of our clients through a selection of
individual equity securities for both long and short positions rather than relying on options
or indexes.
We look for unrecognized situations in the market to generate alpha on the long side. On
the short side, we short companies with unsustainable business models where we have a
line of sight to impairment. We believe a few key issues determine whether we are right or
wrong on each idea. Our research process centers on these issues rather than unrelated,
extraneous information. While we invest with a 3-year horizon, we believe returns are
usually achieved when short-term fundamentals are on our side. We seek improving
situations on the long side and deteriorating
situations on shorts. We believe returns can be
improved by actively managing investment behaviors. We utilize Bayesian updating to
build and size positions methodically in an effort to avoid bias.
Our firm tailors our advisory services to the individual needs and specified investment
mandate of our clients. Our firm strictly adheres to the investment strategy set forth in each
client’s private placement memorandum or other governing documents, as applicable. We
do not, however, tailor our advisory services to the individual needs or any specified
investment mandates of the investors in any private commingled funds and investors may
not impose restrictions on investing in certain securities or types of securities in such funds.
Separately managed account clients receive tailored advisory services and are able to
impose such restrictions on the management of their account.
We do not participate in any wrap fee programs.
As of December 31, 2023, we had discretion over $743,390,536 in regulatory assets under
management.