The last few years have seen tech infiltrate retail investing. Long gone are the days when you needed to set up a brokerage account and pay expensive fees. Several innovative companies have emerged such as commission-free trading app Robinhood or Robo-advisors such as Wealthfront and Betterment, which charge much smaller management fees than most traditional fund management platforms. However, whilst many Millennials have flocked to these platforms and some have gained positive returns by trading themselves, the lack of understanding of things such as leverage, has led the majority to be on the losing end of the stick. One Millennial raising a fund to offer a better solution, mixing the old with the new, is Haris Khurshid, founder of Fate Capital Management.
With roots in Chicago, Haris attended Michigan State University where he studied Economics, then furthered his education with Columbia University, studying Finance. However, neither of these places taught him the concept of investing, “there were really no classes focused on investing. There was accounting, finance, and economics, which are all important—but nothing on investing.”
He figured he had to create a self-study program if he wanted to learn investing and the best way to learn was by doing, so he opened up a brokerage account and started investing, “having actual capital at risk really is the best way to learn” he says. Although he didn’t have any mentors for guidance, he says investing is something that can be self-taught, “I learned the most from reading and some of these authors were mentors to me, in a sense. You can learn a lot from someone without ever meeting them.”
Upon graduation instead of going to work for a fund manager, Haris decided to go the unorthodox route of working in multiple industries to learn how companies operate from different angles i.e. from investment banking to management consulting to private equity, “I wanted to approach investing my way, rather than simply adopting someone else’s investment style and in that sense, all my moves were quite strategic in shaping my investment philosophy.” These different experiences allowed him to experience firsthand how companies operate from the inside out. After which, the final move Haris felt he needed to make was somewhere he could mold together all that he had learned and execute. This led him to take up a role at a venture-backed startup, leading their finance and corporate strategy efforts.
Through all of these experiences, Haris continued developing his investing strategies and also transitioned his portfolio from direct equity investing to options. This transition led him to realize the amount of money people were simply leaving on the table by overlooking the relatively simple strategy of premium collection. While investors can trade options themselves on platforms such as Robinhood, only a few can afford to sell (or write) options to collect premiums. To do this investors would either have to purchase 100 shares of a company such as Amazon or Facebook (which could get quite expensive) and even fewer can afford to risk trading on margin, due to lack of knowledge and the risks involved.
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When Covid-19 hit in early 2020 he noticed many of his friends ended up being laid off, which forced them to liquidate their portfolios to meet their short-term obligations such as rent, mortgages, and car payments. “This made me realize, investing for the future is something that our generation really procrastinates on and this pandemic has shown us just how important financial management is regardless of age.”
This is when Haris got the idea for Fate Capital—realizing he could launch a fund that would provide investors with an additional passive income stream, without them having to deviate from their long-term financial plans. The premise was built around pooling money together to create enough collective buying power to get the benefits of larger managed funds, but with relatively affordable minimum investment amounts. After an initial fundraise the fund was officially launched in mid-late 2020 and has been featured in numerous press including Bloomberg, Inc. Magazine and The Washington Post, among various other finance publications and journals.
The fund caters mostly to Millennials over other demographics, which consequently allowed them to participate in the ‘meme’ stock craze which happened in 2020/21. However, instead of simply buying these stocks outright, the fund created an algorithm which scanned forums/blogs and ranked the most talked about names, taking advantage of changes in their volatility. ‘Dedicating a small percentage of our AUM towards social movements like the GameStop saga, allows our investors to be involved in something they believe in, but in a safe manner, and most of all without steering away from their long term financial goals.’
During a time when many people are criticizing the growth of Millennial retail investors, Haris is making an effort to change the narrative, helping these investors make better decisions whilst also investing for their futures and safely partake in these ‘social movements.’
This article is part of a series featuring diverse people making a difference. To submit ideas for features or keep up to date with new releases you can find me on Twitter – @TommyPF91