Kyle Bass, who famously bet against subprime, is now snapping up land in Texas, Florida and other red states

By Louis Goss

Hedge fund manager Kyle Bass is seeking to double down on investments in real estate in places including Florida, Texas, and Tennessee in a bid to capitalize on the internal migrations that are seeing Americans leave the U.S.'s most expensive areas in pursuit of more affordable lifestyles.

In an interview with The Investor's Podcast Network, the Miami born billionaire said he's seeking to continue buying property in the "pro business, lower cost, lower or no tax jurisdictions" that people are moving to from "very high cost, very high tax" places on America's East and West coasts.

"Where are the population movements happening in America? They're moving to pro business, lower cost, lower or no tax jurisdictions," Bass said. "You see massive population movements to places like Florida, Tennessee and Texas... I want to buy real estate in front of that macro movement."

The billionaire investor, who is credited for having previously predicted the subprime mortgage crisis that led to the 2008 crash, previously told Bloomberg in 2022 he was aiming to turn Texas land into its own asset class by profiting on U.S. internal migration.

Texas saw its population increase by by 1.36 million people from 29.14 million in 2020 to 30.5 million in 2023, according to U.S. Census Bureau data. California has seen its population decline by 573,000, to 38.97 million over the same period of time.

In his interview earlier this week, Bass restated his intentions as he explained that he is specifically looking to purchase property in those more affordable places that could host businesses.

A raft of top U.S. companies including Tesla (TSLA) and Oracle Corp (ORCL) have moved from California to Texas over the past few years, seeking to benefit from lower taxes and property prices.

"You have to move real companies where there's affordability, where there's expansive activity, where there are natural resources to accommodate those movements," Bass, who founded Dallas-headquartered hedge fund Hayman Capital Management, said.

The hedge fund manager explained that he also plans to continue buying up U.S. land, with a view to capitalizing on the growing market for "federally regulated" environmental credits that are obtained from the U.S. government.

Bass, who has now focused his attention towards the sustainability-focused private equity firm, Conservation Equity Management, that he started in 2021, said he believes investing in land will help him grow his wealth long-term.

"When you think about generational wealth over time, how many big generational wealthy families do you know that own a lot of land in interesting areas? Just about all of them, right? That's what we're doing at our firm," Bass said.

The hedge fund manager's call follows his accurate prediction in January 2022 that the stock market would decline that year due to interest rate rises and quantitative tightening by the Federal Reserve.

In an interview with MarketWatch in November 2021, Bass had previously predicted that the crypto bubble would crash, arguing that investors should start piling into assets including real estate.

The investor, who featured in Michael Lewis' 2010 book 'The Big Short,' also hit out at the "D.C. elite" and U.S. Federal Reserve for failing to properly acknowledge inflation. "Bottom line is, they're not admitting to the inflation that they just created," Bass said.

Just a day earlier, the hedge fund manager had sought to make a similar point on X, formerly Twitter, by posting a receipt for a hotel breakfast that cost $85. "Terrible Inflation milestone reached - My first $85 breakfast for one at a NYC hotel," Bass said.

His post was, however, hit with a community note that pointed out that rooms in the 5-star Carlyle Hotel in Manhattan - where Bass is believed to have stayed - cost between $954 and $6,244 per night, while Twitter users pointed out that room service is known for being expensive.

-Louis Goss

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03-01-24 0713ET

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