The Hermit | Institutional Research
Core Mission
We’re an active operating firm focused on extraordinary companies with market caps under $2bn.
We love building up and scaling companies. Whether we're buying a private company outright or taking a 1-5% minority stake in a listed one, we partner with teams to scale them to the next level.
We use primary research, scuttlebutt, and forensic analysis to find businesses that are heavily mispriced despite being exceptionally well-managed.
Why Small Caps?
We call it permanent alpha by design.
Structural Asymmetry: Big banks cannot deploy capital into these companies due to size constraints. That means no analyst coverage, no efficiency, and massive opportunity.
Access: Management answers our calls. We visit factories. We verify the data ourselves.
The One-Foot Hurdle: We don’t look for complex puzzles. We look for obvious, mispriced monopolies that are simply too small for Index Funds to care.
We aim to get as close to pure certainty as possible. Once we gather the information, we allocate meaningful capital (~10%) to each position.
What We Deliver
Our Investing Journey. Essays on cognitive biases, the psychology of money, primary field research, and the reality of running a fund.
Core Thesis. Paid ($30/year)
The Institutional Deep Dive. A 30+ page thesis based on primary data. We cover the business model, the moat, the catalysts, the risks, and the valuation. This is our owner’s manual for each and every company we purchase.
Our Pick of the Week. Concise, high-conviction snapshot of a fresh company in our crosshairs. We focus on undervalued assets, ignored backlogs, or margin expansion stories.
Access. Founding ($699/year)
Priority Briefings. Investing is dynamic, and so is our research. We regularly speak with the management teams. These are highlights and transcripts from these conversations with actionable updates on how the business is evolving.
The Hermit Portfolio. The full allocation of our net worth: individual equities, ETFs, alternative assets, and private holdings. You get detailed updates on exactly what we are buying and selling and why.
The Hermit Community
To address accessibility while protecting the community, we deliver almost exclusively paid content. We don’t want casual browsers, but committed members of a community that has been growing in quality for a long time.
Our annual subscription is Substack’s nominal platform minimum ($30/year).
This fee isn’t meant to monetize research for profit; it serves strictly as a filter against automated scrapers, bot crawlers, and general noise, ensuring our community remains focused on serious market participants.
We’ve split the offering into two distinct paths:
The Annual Sub ($30/year): If you want the research component (write-ups, PoW). If you’re new to investing, want to learn the ropes and start your journey correctly, here’s a low-friction option to participate.
The Inner Circle Sub ($699/year): If you want the full journey component, direct access, and game-changing insight from exclusive conversations.
About The Author
I’m Alejandro Yela, head of our bootstrapped Hermit Ventures and former Principal Advisor of Equity Focus FIL.
My professional background spans restructuring, project finance, and M&A, which means I spent years running intense Excel marathons.
But unlike many of my investment peers, I’ve also operated businesses and held seats as a board member and observer. Living life in the operator’s seat gives me a real edge when discussing day-to-day corporate challenges… because I’ve actually been in their shoes.
I hold a dual degree in Law & Economics from UNAV, two Master’s degrees (Management & Finance) from IE Business School, and have completed levels of CFA and CAIA, and hold various complex financial modelling (ISBIF) and European (MiFID II) Financial Advisor credentials.
Over the years, I’ve had various media appearances; here’s a curated collection of them.
I don’t rely on complex modeling to value a business. If the value isn’t obvious on the back of a napkin, we pass.
We look for certainty, we bet big, and we wait.
