2026 August Session: Felicity Tan w/ Red Ember Capital
Updated: Sep 20
HedgeFund: Insights from Felicity Tan
2026.08.15
Section 1: Career Path, Leadership & Building Red Ember
Q1: How did you get into investing, and what led you to start Red Ember?
Felicity Tan grew up in Singapore and did not initially plan to enter finance. While working on nonprofit projects in college, she realized that creating meaningful impact required three things she lacked at the time: connections, capital, and skills.
This realization led her to consulting, an MBA at Chicago, Morgan Stanley Investment Banking in New York, and eventually a Tiger-style hedge fund, where she spent seven years learning public-market investing.
Throughout her career, she prioritized learning, mentorship, and longevity over prestige. After her hedge fund shut down, she decided to start Red Ember. One motivation was noticing how few female portfolio managers existed and asking herself, “Why not me?”
Q2: What qualities do you look for when building an investment team?
Performance comes first, but Felicity also values intellectual honesty, humility, courage, and genuine curiosity. She prefers candidates who have demonstrated deep commitment to something and produced tangible results rather than relying solely on credentials.
As a manager, she also tries to understand the motivations behind difficult behavior instead of immediately labeling someone as “difficult.” Her leadership philosophy is to absorb external pressure and translate market and client stress into clear priorities and deadlines for junior team members.
Q3: What career lessons have been most important to you?
Felicity emphasized choosing opportunities based on learning and people rather than prestige. For example, at Morgan Stanley, she chose the Transportation team over the more prestigious M&A group because of the people in the team.
For networking, her simplest advice is to “follow up.” Genuine coffee chats, thoughtful questions, and consistent follow-up can compound into valuable relationships over many years. She also recommends developing relationships with people only one or two levels ahead so that the network can “age” alongside one’s own career.
Section 2: Investment Philosophy & Research Process
Q1: What creates an investment edge in today’s market?
Felicity believes that information edge has become increasingly commoditized because investors now have broad access to filings, interviews, podcasts, and large amounts of data.
As a result, behavioral edge has become more important. Investors need the intellectual honesty to continuously challenge their own thesis and consider opposing views, while also having the courage to act differently from consensus when their research supports it.
A key capability is remaining rational when fear is high and distinguishing genuine deterioration in fundamentals from market-driven panic.
Q2: How does Red Ember’s investment philosophy differ from the traditional Tiger-style approach?
The traditional Tiger philosophy is often described as “long good companies, short bad companies.” Red Ember instead focuses more on long undervalued companies and short overvalued companies.
A great company can still be a poor investment if purchased at the wrong price. Therefore, the gap between what the market expects and what the company ultimately delivers is critical.
Management quality also matters, particularly for high-growth companies, because strong management teams may expand successfully into new products and sustain growth beyond expectations.
Q3: What are “Parttime Projects,” and how do they improve investment decisions?
“Parttime Projects” refer to deeply researching companies and sectors before an investment opportunity actually emerges.
When a stock suddenly falls, investors rarely have enough time to begin their research from scratch. Building knowledge in advance allows them to act quickly when price and fundamentals diverge.
Felicity cited Meta and memory semiconductors as examples. Years of studying these businesses enabled her to act quickly when valuations became attractive. She protects roughly two hours each day for deep research because she believes consistent learning compounds into expertise over time.
Section 3: Portfolio Management, AI & Market Opportunities
Q1: How do you think about position sizing and knowing when to exit an investment?
High conviction should be reflected in position sizing. If an investor has done extensive research and understands a company exceptionally well, a very small position may not contribute meaningfully to portfolio returns.
However, every position must continuously compete against alternative opportunities.
Felicity believes exits are psychologically more difficult than entries because investors can become attached to successful positions or continue holding losing positions in hopes of recovering. The key question is whether the investment still deserves its place in the portfolio at its current price.
Q2: How do you manage risk during sharp market sell-offs?
Felicity follows the principle “panic early or double down late.”
When uncertainty first emerges, investors can reduce risk early. Alternatively, they can wait until valuations become sufficiently attractive before taking meaningful risk again.
She views the middle of a sell-off as particularly dangerous: prices may already be falling significantly but may not yet be genuinely cheap.
Q3: How are you using AI in your investment process?
AI now touches nearly every part of Felicity’s workflow. She uses AI tools to build dashboards, screen filings, summarize earnings calls, accelerate learning, and assist with financial modeling.
However, she deliberately keeps herself “in the loop.” AI is used to increase research speed rather than outsource investment judgment.
Q4: Where do you currently see opportunities in AI infrastructure and semiconductors?
Felicity remains constructive on parts of the AI infrastructure ecosystem, although opportunities vary substantially across subsectors. She views optical AI-related infrastructure as relatively underappreciated, while physical AI represents longer-term optionality that still requires further evidence.
Her investment in SK Hynix and other memory companies came from identifying a semiconductor bottleneck and modeling AI-driven demand against relatively predictable supply. She concluded that potential earnings were significantly greater than valuations implied.
However, because semiconductors remain cyclical, investors need to monitor supply-demand dynamics closely and react more actively than they would with traditional long-term compounders.
She also sees growing global investor interest in Korea because of its importance within the AI and semiconductor supply chain. At the same time, following significant market moves, she emphasizes continued research rather than chasing momentum.
From Our Mentees 💬
Minjoo Kang, Mentee
I was particularly interested in her concept of “Parttime Projects”—building deep knowledge before an investment opportunity appears so that investors can act with conviction when markets become volatile. Her approach reinforced the importance of continuous research, independent thinking, and being prepared before opportunities emerge.
My personal takeaway is that good decisions are often the result of preparation long before the actual decision needs to be made. I want to build a habit of consistently developing my own views rather than simply reacting to new information or opportunities as they appear.
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