A Good Hedge Fund

What if a hedge fund took 10% of its profits and used it to improve the world? What about 20%, or 40%? What would that look like? What would it change? Would it even be possible?

Well…we’re going to find out.

At Eleven Point 0 we believe that the business of managing other people’s money is ripe for disruption. But maybe not the type of disruption everyone seems to be focused on.

While we applaud technological innovation, such as the fascinating advances Numerai is a working on, we’re simply not that smart.

However, we are acutely aware of the global challenges we face as a society. And we think we’ve found a way to help solve some of those challenges (even if only in a small way).

That is why we are committing to allocating at least 10% of our annual profits (and hopefully much more down the road)to programs aimed at addressing and/or solving our most pressing global challenges.

How will we do this?

Well, we charge reasonable fees to invest other people’s money for them.

A substantial portion of the modest fees we earn for producing investment returns (assuming there are any returns…one can hope) will then be allocated to a wide variety of projects and initiatives aimed at solving our most pressing global challenges.

How will we generate returns?

We’re value Impact investors. We believe that over the long term investing in environmentally sustainable and socially conscious companies (with little debt, good returns on equity and a durable competitive advantage) will produce above average returns.

And we like to think in ten year blocks.

Ten Year Blocks

We want to buy companies that will grow earnings for 10–20 years down the road. To do that we try to envison what will happen in the coming decades. This is mired in uncertainty. No one knows what is going to happen. We certainly don’t claim to either. But, in investing you make high probability bets on what you think is likely to happen.

It’s all guessing, really. These are ours:

90s – start of the internet/crazy valuations/led to a crash/ internet knocked down but not out.

00s – terrorism/housing bubble/social networks/internet gets back up/global economy knocked down but not out

10s – mobile eats everything/climate change/elon musk/Amazon/facebook/global economy reflates

20s – AI/electric autonomous transportation/clean energy/sustainable agriculture/urbanization/cities of the future/urban agriculture/Mars/water for everyone/disease mitigation/more terrorism/more effects of climate change(droughts/heat waves/flooding)/infrastructure improvements/massive population growth/VR/AR/continued rise of China’s middle class/increased demand for base needs in emerging economies/ reduction in worldwide poverty/human brain enhancements/and likely another market crash somewhere in here

30s – dramatic life extension/space tourism/disease eradication/climate engineering…..

And the list goes on and on.

Reality Check

Now, some of you will almost certainly say that this is all just a burning pile of…you know what.

Just another “shady” hedge fund trying to make piles of money. Well, you’re right.

We are trying to make piles of money. Boatloads if possible. And then redirect a large portion of that money to worthy causes and initiatives. One we especially love is 1% For The Planet.

Listen, we know some of you will laugh at this statement. Many won’t believe it. And most will ignore this post entirely.

That is all fine with us.

Regardless, this is what we’re doing.

We’re taking action.

We believe we owe it to ourselves, and to our children.

This is a difficult task we’ve set for ourselves for sure. But a worthy one. There will be failures and disappointments and successes along the way. We promise to be honest and empathetic and extremely open-minded during this journey.

We want to engage with the broader investment community, the broader sustainability/environmental/divestment community, and anyone else who is passionate about protecting our planet.

Feel free to email me directly at Philip.decker@11point0.com.

Thank for your time.

We look forward to the challenges ahead.

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