Kirsch Capital update

We invest in a portfolio of funds run by stellar investment managers all with $100M or more assets under management. Our best manager has a 50% annual return averaged over the last 7 years.

Executive summary

If you have $250,000 or more in investable capital and have a net worth of $5M or more, the investment fund that I started late last year may be of interest.

The fund allows you to diversify your investments in a market-neutral diversified portfolio managed by not more than 10 top-tier investment managers with an expectation of higher than S&P returns on a consistent basis.

It’s particularly attractive during uncertain stock market conditions (like what we have today).

Introduction

Late last year, I announced I was starting a “fund of funds” primarily to manage my own money.

Opening up my fund to outside investors enables me to invest into underlying funds with higher investment minimums so it’s a win-win for everyone.

Dozens of my Substack readers have already invested amounts ranging from $100K to $800K in the fund.

The catch

Due to our 506(c) status (which enables us to legally make posts such as this one), we can CURRENTLY only accept funds from investors or entities with a net worth of $5M or more.

We’ll be able to lower the minimum investor net worth requirement to $1M in the near future (after we exceed $25M AUM).

This restriction was not my idea. This is due to US law which was put in place to protect unsophisticated investors from investment scams. Because, as we all know, our government is always doing things to protect us from harm because they believe we are incapable of making important decisions on our own.

The 5 goals of the fund

1. Beat the S&P (we are looking to get 20% or more annual returns)

2. Near-zero correlation with the S&P (today it’s slightly negative which makes it very complementary to stock market concentrated portfolios)

3. Monthly liquidity (so you capital isn’t locked up for 10 years like venture funds, real estate funds, or private equity funds)

4. Consistency. We only invest in proven firms with strategies that are consistent, have low drawdowns, have a 5 year or longer track record, and have at least $100M under management.

5. Consistent all-weather performance. We enhance our 0% correlation objective with investing 5% to 10% of assets in high performing “tail-risk funds” to provide “extra return” to our investors when things go south. Tail risk funds provide a slight drag on our returns but when things go south in other markets (like the stock market), these funds have huge outsized returns.

This makes our fund an ideal complement to any existing investment strategy, whether it is concentrated in stocks, real estate, or diversified. In normal situations, you’ll get strong returns from both.

Investment criteria

It took 2 years to identify the underlying funds we invested in.

The fund basically invests in a small number of little-known, high performing funds that are both hard to find and very difficult to get into.

In our case, all our underlying funds are evaluated on a variety of factors, primarily their strategy, performance, repeatability, consistency, and management team. All have 5 year performance track records, stellar management, and each has $100M or more assets under management. This is why it took so long to find these funds.

The fund is ideal for public charities (such as community foundations) and well as private foundations due to their tax-exempt status.

Investment advisors

We also have very experienced outside investment advisors, including former Blackrock fund manager Ed Dowd, that approve all our investments.

We started in 2024 and have beat the S&P so far in actual returns for our investors.

Historical performance of the underlying funds we chose

Here’s the 5-year combined performance of our portfolio: 32% average per year.

Historical returns of the funds in our portfolio

My pitch is simple:

If you can find 10 other funds with higher potential returns, invest in those 10. And please drop me a note in the comments because I’d love to know about them because we are always on the lookout for adding new funds.

But if we are one of the top 10 funds that you’ve identified as a potential investment, then check out the Next Steps section below.

Are there better “fund of funds” investments out there?

There are other fund of funds alternatives.

But I’m not aware of any that match what we’ve put together.

If I’m wrong, please let me know in the comments.

Most of the “fund of funds” invest in 20 or more underlying funds and end up getting returns that are lower than the S&P.

The reason is simple: it is extremely hard to find excellent underlying funds. Finding 20 such funds is darn near impossible.

So rather than repeat the mistakes of others, we focused on finding 5 underlying funds and researched the crap out of them.

This is why none of our investors has withdrawn funds and several have substantially increased their positions since investing.

Why did I create this fund?

Because I wanted a “meta-fund” that I could invest in with the criteria I outlined above and a stellar 5 year (or longer) track record and I couldn’t find one anywhere close.

So I built my own.

We use well-known professional firms to handle all administrative functions

We rely on professional management firms for all the investor reporting and fund management. It’s all outsourced to well-known firms. So your money goes to them and they invest it on behalf of the fund. We are not in the funds flow at all.

Target market

Our ideal investor is someone with an investment portfolio of $1M or more who is seeking to diversify their asset base to achieve market-leading returns.

This is also the ideal investment for individuals with a Roth IRA as your investment compounds tax free.

We provide access to a diversified portfolio of complementary high performing assets with close to zero correlation with the stock market.

This is also ideal for charitable funds because of their tax-exempt status. In many cases, we will more than double the return they are getting today on their assets.

Can anyone easily replicate what I’ve done?

No, not that I’m aware of. I looked for something like this and if there was one, I would have invested!!

This is a highly competitive space and the best managers don’t share their best investments because when a fund opens up for new investments, they want to be first in line; they don’t want competition.

So just like a VC firm, we have to do a lot of homework and diligence to find these investments. And it really helps to have a huge network (like I do).

Is our portfolio of funds competitive with your existing portfolio?

Let me give you an example.

Here’s the track record of one of our five underlying funds: a 50% annualized return on average over the past 7 years.

This is the best performing underlying fund in our portfolio. Compare it to the best underlying fund in your current investment portfolio.

Most people have never heard of such a fund.

And if you did hear of such a fund, you’d likely stop right there because it sounds too good to be true.

But hey, I’m not most people.

My team spent 3 months checking them out before investing. We even paid a lot of money to have a third party due diligence firm to check them out just to make sure we were being objective and not missing anything. They are legit.

They are basically a miniature version of the Renaissance Medallion Fund. This company employs over 60 top notch engineers to do the magic. They employ very clever techniques so they can make money with near zero risk. It’s repeatable and it’s hard to replicate. But it isn’t scalable beyond a few hundred million.

They basically have a proprietary edge in a decent sized market space. That’s precisely what we look for in our underlying funds. In this case, it was a technology edge.

And just like the Medallion Fund (which is IMPOSSIBLE to get into), this fund is extremely hard to get into because they are instantly oversubscribed.

These are the types of “unicorn funds” I’ve been able to locate, research, and get into. That’s the difference. It’s not just doing historical return research and slapping together a bunch of funds that look good on paper.

Also, this is just the beginning because there are a number of other funds that we are currently researching with equally impressive returns as our currently best performing funds. Our portfolio is actively managed.

Caveats and disclaimers

Historical performance of underlying funds is no guarantee that such returns are repeatable. See the disclaimers in the two links in the “next steps” section for details.

We operate under SEC Regulation D Rule 506(c) which allows social media articles such as this one. I say this because some people thought we operated under 506(b) where article like this one are not permitted.

Next steps

If you qualify to invest, you can find additional details in these two links:

• Kirsch Capital Fund overview

• Kirsch Capital Dec 2024 Tear Sheet (actual performance to date)

If you would like to learn more, join an investor call and talk with our current investors, or get the subscription documents, here’s the form to fill out to take the next step.