Kenneth U. Reyes, Esq., CPA, CFLS
CEO and Portfolio Manager
Mr. Reyes is both a CPA and an Attorney. Mr. Reyes brings over 30 years of investment expertise and a unique blend of business, accounting, and legal acumen to Reyes Capital Management. He earned his Bachelor of Science (BS) degree in Business Administration with a concentration in Public Accounting from California State University at San Bernardino and became a CPA, working at prestigious firms like Arthur Andersen, LLP, and Bank of America, where he mastered accounting, auditing, tax and financial statement analysis. His early experience in turning around his family’s low-margin restaurant business instilled a focus on high-margin, high return on invested capital, and competitively advantaged businesses.
Mr. Reyes also holds a Juris Doctor (JD) degree from Southwestern University School of Law in Los Angeles. Mr. Reyes is Founder and Managing Partner of a successful law firm in Los Angeles. His hands-on experience in managing his law firm’s retirement funds and a Certificate in Value Investing from Columbia Business School further underscore his comprehensive skill set, making him a well-rounded and insightful investment manager.
Warren Buffett often said that “Accounting is the language of business.” Buffett often used this phrase to emphasize the importance of understanding financial statements in business and investing. He believes that just as you need to be fluent in a language to understand a country’s culture, you need to be fluent in accounting to understand a business’s health and prospects. Mr. Reyes’ background and experience as a CPA prior to becoming an Attorney has equipped him with important skills necessary to properly understand and evaluate a business. During his career as a CPA and in finance, he has evaluated hundreds of businesses from both a quantitative and qualitative perspective. Mr Reyes’ experience as a trial lawyer provided him with a powerful mental framework for critical thinking, risk evaluation, and understanding the deeper qualitative aspects of businesses, all of which are instrumental in achieving success as an investor.
In 1999, Kenneth U. Reyes founded the Law Offices of Kenneth U. Reyes, APC. Based in Los Angeles, California, the five-lawyer boutique firm specializes in family law litigation and continues to be owned and operated by Mr. Reyes today. Based in Los Angeles, California, the five-lawyer boutique firm specializes in family law litigation and continues to be owned and operated by Mr. Reyes today. In July 2023, Kenneth U. Reyes founded Reyes Capital Management, LLC which he owns and operates from the same Los Angeles office as the law firm. Having the law firm to manage lends itself to better investment results for the investment firm. Not only are we able to keep the investment firm’s overhead low, such as not having to pay office rent and support staff, but it also keeps us from being overactive with marketable securities. By analogy, Warren Buffett continued to manage Berkshire Hathaway’s multibillion-dollar stock portfolio while acting as CEO of Salomon Brothers, Inc. from 1991 to 1992. In his 1991 Letter to Shareholders, Buffett specifically addressed this dual role, stating that his job at Berkshire Hathaway was “merely to treat [the operating managers] right and to allocate the capital they generate. Neither function is impeded by my work at Salomon.” Charlie Munger also operated his investment fund Wheeler, Munger & Co. while practicing law at Munger, Tolles & Olson from 1962 to 1965.
Finally, Mr. Reyes has skin in the game in managing the fund. A fund manager having a substantial investment in their own fund is crucial for aligning interests and fostering investor confidence. This “skin in the game” motivates the manager to make prudent decisions, thoroughly analyze investments, and manage risk effectively, as their own financial well-being is directly tied to the fund’s performance. It promotes a long-term focus and helps mitigate conflicts of interest, assuring investors that the manager is genuinely committed to generating strong returns. It is critical for a fund manager to have a substantial investment in their own fund because it creates “skin in the game,” directly aligning their financial success with that of their investors. This fosters greater diligence, prudence, and a long-term focus in decision-making, as the manager shares the same risks and rewards. This alignment builds investor confidence and trust, minimizing potential conflicts of interest and encouraging more responsible capital allocation.
