Welcome to Sunday’s Idea Brunch, your interview series with great off-the-beaten-path investors. We are very excited to interview Will Hamilton and Albert Hanser!
Will is a Partner at Kestrel Merchant Partners, a Boston-based merchant bank founded by Albert Hanser that invests in small-cap special situations. The firm’s two equity funds, the Kestrel Flight Fund and the Kestrel Phoenix Fund, invest in small public companies going through transition. Before joining Kestrel in 2025, Will spent 10 years as a Partner at Manatuck Hill Partners, a small-cap hedge fund in Connecticut, and five years as an analyst at Granite Point Capital, a small-cap hedge fund in Boston. Earlier he was a sell-side equity analyst at Sanders Morris Harris. Will holds a B.A. from Duke University, is a CFA charter holder and lives in Connecticut with his wife and two children.
Albert founded Kestrel Merchant Partners in 2019. He has 30 years of experience in emerging growth and special situations equity spanning London, New York, San Francisco and Boston. Previously, Albert was Managing Director of investment banking at Craig-Hallum Capital Group for seven years and ran the Boston office for the original ThinkEquity Partners for nine years. Earlier, Albert worked with Alex. Brown & Sons through the Deutsche Bank acquisition and began his career on the trading floor of Piper Jaffray. Albert received his B.A. from Brown University and lives in Boston with his wife and three children.
Will and Albert, thanks for doing Sunday’s Idea Brunch! Can you please tell readers a little more about your backgrounds and the strategy at Kestrel Merchant Partners?
Will: I have been in equity research and portfolio management for over 20 years, primarily in small caps. Before joining Kestrel, I worked at two small cap hedge funds where I looked for orphaned and under followed companies that were often undergoing a turnaround. I had known Albert for a decade, and we began talking about turnaround opportunities among all the busted SPACs and broken IPOs from the 2020-2021 boom period. We both thought it would be a perfect fit in Kestrel’s special situation mandate so in April 2025 I joined the firm to launch the Kestrel Phoenix Fund (KPF). Since inception that June the fund is up about 30% net.
Albert: I have a non-traditional background for portfolio management. I spent 22 years in investment banking selling, sourcing and syndicating small cap growth investments. Over that timeframe, the small cap landscape changed dramatically leaving many smaller companies abandoned to non-fundamental structure funds damaging cap tables and performance. I saw an opportunity to launch a merchant bank focused on fundamental investing in small cap special situations. Our first fund was the Kestrel Flight Fund (KFF) investing in sub $100M market cap turnarounds, a category we call “public venture”. We use our banking skillset to help these companies navigate significant transitions. The fund looks and feels like a venture fund in the public markets but without a 10-year lock up. Since inception, the fund is up ~500% net.
Kestrel’s two small cap equity funds target what the firm calls PUMAs. Please tell us about that acronym and what is the philosophy behind those four catalysts for each fund?
The PUMA process is a lens we use to identify turnarounds and companies experiencing a change that will be a catalyst for growth and increased shareholder value. For the public venture Kestrel Flight Fund, we look for new Product cycles, Uplistings, Management changes and Acquisitions that accompany big pivots. For the Phoenix Fund, we screen for Profitability improvement, Unburdening cap table, Management team, and Attractive growth. KPF is looking for busted SPAC and turnarounds that are making the pivot from operating losses to positive earnings and free cash flow, along with cleaning up the capital structure by eliminating warrants, earn-outs, debt, preferred shares or collapsing dual-class shares. These developments can be major catalysts for the stocks, especially when coupled with good management teams and growth opportunities.
Albert, the Kestrel Flight Fund will make direct investments into small caps?
Yes, our investment banking capabilities enable us to make direct investments onto the balance sheets of companies in transition. It allows us to put capital to work efficiently with the greatest impact. Not all turnarounds require funding, but when they do it gets us in front of new situations early where they may need help and guidance. We lead with our own capital and work closely with management teams, boards and fundamental investors who join us in an investment. This collaborative process is an important piece of the equation that is good for companies and our partners.
Will, what makes busted SPACs an interesting investment right now for the Kestrel Phoenix Fund?
The fantastic boom and bust period for SPACs in 2020-2022 is analogous to what happened in dot-com tech period of late 90s/early 2000s. Many early stage, unprofitable companies went public with aggressive financial projections and excessive valuations. When interest rates went up in 2022, as they did in 2000-2001, those valuations came crashing down. From the rubble of the dot-com collapse many companies emerged that became today’s blue-chip companies. We believe a similar opportunity exists among the cohort of former SPAC companies as some transform their businesses, improve profitability, and/or clean up their balance sheets. Proprietary data we collected also shows that former SPAC on average outperform in years four and five post de-SPAC, which is the window many are entering now. These fundamental changes are often initially going unnoticed because the group became so hated, so it is certainly a contrarian idea.