Friday, May 16, 2008

And off we go...

So let me explain a little about what I'm doing, why I'm doing it, and what I think about.

I have decided to start a hedge fund. A green hedge fund. I've decided to do this for several reasons.

1.) Sustainability is important to me. Investing responsibly is important to me.

I just spent three years as a licensed stock broker specializing in real estate (REITs), managed futures, and other alternative investment vehicles. Really, I spent three years making money for other people, getting very little validation, expending virtually no brain power, and helping to perpetuate the "make money no matter the cost" mentality.

I put my fut down when our firm decided to sell oil and gas, but there's no stopping "progress." So, rather than fighting an uphill battle I definitely won't win, I decided to fight an uphill battle I probably won't win.

2.) Investing responsibly doesn't have to mean giving up return.

I'm smart, but I know I'm not smarter than the thousands of PhD's and investment bankers and fund managers in finance trying to make money in the markets. But somehow, I still feel like Wall Street hasn't figured out how to make money and keep Main Street clean, local, and happy. In fact, it's usually just the opposite - Wall Street usually makes its money at Main Street's expense.

I've been modeling my fund for over a year and half. When I say modeling, I mean complicated Excel sheets that would be far easier in VBA and Access or C++, but I am not a programmer. Instead, I decided to stick with my strengths. I've chosen an asset base using a combination of biocapacity studies and discretionary research that expands the notion of green beyond most normal definitions. I decided early on that green can't just be green energy - it has to be a green lifestyle, from the micro level (specific stocks or bonds) to the macro level (industry, commodity, and currency). By expanding my definition of green, I think returns can often be the same, if not better, than the open market. If I can offer the option to hopefully make the same amount or more than the S&P and be responsible, why wouldn't someone invest? That's the theory at least.

2.) I don't want to work for anyone anymore.

I'm not that interested in riches. I'm not interested in being a big shot. I don't need vast success, I don't want magazine covers, I don't want to be famous. I just don't want someone telling me what to do. I like to dress like a hipster, bleach my hair, get (more) tattoos, and wake up at 10am. It's very elitist of me, yes. It's pretty privileged, I admit. But I want to shop at farmer's markets, go to the beach and be outside, and I want to be proud that I'm doing something a little more responsible. Plus, somebody needs to take care of the kids while my wife is in rounds at the hospital.

The worst part of starting a hedge fund is the client base. I don't care that most of the people that can afford hedge funds are old white men and old white institutions. What bothers me is that I'm not allowed to sell something like this to the people like me. Unless they're worth a million bucks. And that pretty much excludes everyone like me.

But if I can get the fund operating, and I can make is self sustaining, maybe I can offer it to people like me.

So there you have it, that's why I'm doing this.

Cross your fingers that it works!

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