Attention all you self-proclaimed money management gurus, Portfolios with Purpose allows you to test your investing chops—soon against some of the biggest names in the business— while raising money for your favorite charity.
The stock-selection contest was founded in 2011 by New York-based hedge fund consultant Stacey Asher.
“I’ve been working in the industry for the past seven years raising money for hedge funds,” Asher told FINalternatives in a recent interview. “I was seeing all the great philanthropic work that a lot of leaders in the industry were doing and at the same time I was inspired by just how much people really love investing. So I just pushed these worlds together.”
Asher launched a test version of the contest last year, reaching out to family and friends to “play and get all the kinks out and get the Web site up,” she said. She’d hoped to convince 30 people to take part but ended up with 100.
“We only ran two classes this past year,” she said, “the Novice Class, which is open to everybody for $100 and then the Professional Class, where you need to have two years of experience.”
Next year, she will add a Master Class and Third Point Capital’s Dan Loeb and Omega Advisor’s Leon Cooperman have already signed up to compete.
This year’s contest features 20 Professional Class competitors (almost all hedge fund managers, she says) and 80 novices. And novice, for PwP’s purposes, truly means novice, Asher says you can play even if you’ve never traded stocks in your life.
The rules for each class are the same: you pick five stocks (minimum market capitalization $500 million) at the beginning of the year to buy or sell, and then you choose the charity you’ll play for. Asher says that while in future they may introduce elements of trading into the competition, for now, they’re keeping it “really simple…more focused on value investing” with a one-year time horizon.
Novices ante up $100 (it’s tax deductable), Professionals $1,000 and Masters will pay $10,000 to play. The money for each class is pooled and prizes are awarded to the first, second and third place finishers in each class. Asher says first place gets 60% of the pot, second place gets 30% and third place 10%.
The top standings are posted on the PwP Web site, along with the name of the competitor’s charity. Charities represented currently run the gamut from Skills for Southern Sudan to Big Brothers and Big Sisters of Texas to the Wounded Warrior Project.
The competition officially launches with a party on Thursday, June 28 from 6:30 to 9:00 P.M. at Le Poisson Rouge, 158 Bleecker Street, New York. The evening will include a performance by The Subscribers, a cover-band made up of financial industry professionals who perform only for charity.
The contest is open to investors all over the world and Asher says it’s a great chance to “come out and really stand up for the charity that you feel strongest about and compete and have fun and try investing if you never have.”