A seven-year veteran of former hedge fund manager Gabe Plotkin’s investment firms is launching his own investment partnership. Michael Montford is raising money for PC3 Partners, a long-only equity portfolio that he prefers not to call a hedge fund. He plans to begin trading in the first quarter of 2026.
PC3 has an absolute-return mandate with the goal of capitalizing on price dislocations in its universe of what it deems to be high-quality businesses and then holding on to them. “Our mindset is to outperform materially over the long term by doing consistently better over the short term,” Montford explained in a phone interview.
PC3 stands for “protect” and “consistently compound capital,” with an emphasis on protecting capital. The investment vehicle is being spun out of Tallwoods Capital, Plotkin’s family office, where Montford built the foundation for PC3 Partners and managed the portfolio with internal capital. Tallwoods will be an anchor investor, and Plotkin will chair PC3’s advisory board.
“Michael is a uniquely talented investor with a deep passion for the equity markets,” says Plotkin in a statement submitted to II. “Over the past seven years working together, it’s been incredibly rewarding to witness his growth, both as an investor and leader. The ways in which Michael and his team have sharpened their long-only strategy during the past three years at Tallwoods has been impressive to watch.”
A preliminary foundation letter, seen by Institutional Investor, stresses that PC3 believes the long-short investment landscape has struggled to adapt to the heavy capital shift to passive and quantitative strategies combined with the rise of highly levered multimanagers. These developments have eroded short alphas, shortening time horizons, increasing risk, and compressing net returns, the letter asserts.
PC3 is designed to address the shortcomings of the current long-short landscape and capitalize on opportunities created by these dynamics, according to the letter. The partnership will also have a hurdle rate, but it won’t be pegged to a specific benchmark.
“We believe in absolute hurdles,” Montford stresses. “We don’t believe in using a benchmark as a hurdle, which often encourages chasing hot sectors and creates a moving target.” The specific hurdle will be discussed with investors.
Montford grew up in Bobcaygeon, Ontario, a town of 2,500 people, and played major junior hockey as a teenager. He scrapped plans to pursue a professional hockey career for academics. He holds an Honours Business Administration from Western University’s Ivey Business School, where he graduated with distinction.
Montford worked in investment banking in the M&A group at BMO Capital Markets in Toronto before joining Evercore in New York in industrials M&A. Seven years ago, he went to Melvin Capital as an analyst covering global technology, media, and life sciences stocks.
Melvin shuttered in 2022 after suffering devastating losses in January 2021, falling victim to the Reddit-fueled retail assault on popularly shorted stocks like GameStop and AMC Entertainment Holdings. Steve Cohen’s Point72 Asset Management and Ken Griffin’s Citadel came to the rescue, pumping $2.75 billion into Melvin in exchange for a share of the revenues over the next three years. Montford stayed with Plotkin and Tallwoods, created after Melvin’s shuttering, where he created PC3 Partners and honed its strategy.
PC3 plans to emphasize businesses with strong moats and identifiable competitive advantages that will allow them to compound intrinsic value at high rates, far in excess of broader equity indices over the medium to long-term, the letter notes. It will focus on the industrials and business services sectors, which the firm believes contains many niche businesses with strong pricing power.
PC3 plans to run with conservative levels of gross exposure, limiting the number of names to 15 to 20 from a small universe of roughly 80 candidates. This compares with a universe of roughly 500 companies at Melvin Capital.
“Relative to the broader market, we own higher-quality businesses with less leverage that will become stronger in a downturn through share gains and acquisitions,” Montford asserts.
The letter refers to investing in “anti-fragile” underlying businesses. It is not known what stocks Tallwoods currently owns, as it does not file a quarterly 13F document detailing its U.S. holdings.
Montford says he learned several lessons from the Melvin debacle. For one, he won’t short individual stocks. Instead, PC3 will short indices or broad-based baskets.
“My lesson is how risk factors can cascade during extreme periods of volatility,” he says.
Montford is also excited about what he perceives will be the market environment when he begins trading at the start of 2026. He notes, “There is a strong probability that market multiples will expand less going forward than they have in recent years. That will make it a much better market for stock pickers to outperform.”