A Better DARWIN for more investor profits and provider revenues

Photo by Marco Verch (License)

We’ve improved the DARWIN!

The new DARWIN goes live 1 June 2020.

On a like for like basis, new DARWINs pay providers more revenues by producing more uncorrelated investor profits with lower target risk. New DARWINs are the first step in a ladder that will gradually engage professional managers and investors… stay tuned.

Meanwhile, here’s the summary of what new DARWIN entails for:

  • Investors:
    • Lower Risk – new DARWINs are as risky as an Equity Index – 35% less risky than to date, to help investors overcome loss aversion,
    • 60% lower (wholesale) commissions, to grow investor profits, trust and ultimately, AuM,
    • Fees: new DARWINs carry 1.2% management p.a. and 20% success fee,
  • Providers:
    • AuM growth, as explained above,
    • More revenue for every unit of AuM and % performance (60% less Brokerage cost),
    • A new success fee split: investors pay 20%, Darwinex keeps 5% and pays providers 15%

We’ve prepared a website to lay out the Old to New Transition including:

  • Timeline: covering what changes, when,
  • Aggregate impact: comparing old vs new DARWINs (hint, NEW is vastly better),
  • Calculators and Charts for the impact on individual DARWINs,
  • Q&A to clarify any outstanding questions.

Play around at https://coda.io/@darwinex/pivot.

Then come back here and let’s discuss!

inversor minorista

Live: DARWIN Check-out

Today we’re rolling out an individual check-out page for every DARWIN on the Exchange.

A DARWIN check-out is a dedicated funnel for a DARWIN provider to on-board Friends & Family AuM to their DARWIN conveniently, legally and effectively. In this entry we:

  • Describe the Check-out feature (v1.0)
  • Explain why managers sourcing Friends & Family AuM build TRUST
  • Would like to encourage your to share your feedback

DARWIN Check-out – WhatIzIt???

The DARWIN check-out is step 3 in your budding Asset Manager career after:

  1. Becoming a DARWIN manager and
  2. Landing your seminal Darwinia seed capital

It’s designed for you to learn pitching to investors by starting with the most friendly investor audience you’ll ever have: your friends and family. And it works by showcasing your DARWIN

  • On mobile
  • Simply: it showcases only the information a new investor expects before committing capital (=trust!) to an investment product.
  • To the Point: your father-in-law will just see a clear call to invest (demo, for the time being), and 3 clicks after your DARWIN is in his demo portfolio
  • Ideally Forever: Your friends and Family will safely carry you in their “Darwinex for investors” Android / iOS app – track.

Whether or not they eventually add to their investment = TRUST is now 100% up to you.

How to Use It?

  1. Find your check-out URL in the sharing settings of your DARWIN page.
  2. Have a look at it and please share your feedback. Request features, react to what others requestand we’ll add them to the next evolution of the check-out!
  3. Join the channel #marketyouralpha we’ve created in the Darwinex Collective Slack space and share your experiences and questions there with other members.

If you’re unsure about the legal status when pitching to your investors, soon we’ll publish a brief explanatory video that covers why you’re squarely on the right side of legality and morality. In short, you’re safe as long as you don’t pitch your DARWIN “by way of business”. You can pitch it in your private circles but when you mention it on a public forum (your website, social media, YouTube, etc.) you should always clarify that you’re not giving investment advice. Again, post any questions here and we’ll be happy to clarify.

DARWIN Check-out – Why?

Darwinex fast-tracks manager “investability” because the faster managers mature, the better for them, investors, Darwinex and the broader Alpha eco-system.

Alas, most managers equate “investable = building a good track-record”… and yet this is only part of the equation. Moreover, it may not even be the most important part – if it were, most hedge Funds wouldn’t fail for operational failures or lack of investor capital.

This makes Investor AuM – NOT performance – are the ONE thing that makes everything else either much simpler or unnecessary for an aspiring hedge fund manager, because:

  • Investor AuM generate revenues,
  • Revenues
    • Buy you time and peace of mind to profit when markets move
    • Pay for cheap and scalable processes

Our Fintech facilitates your ONE thing through:

  1. The “Fin” layer -> our trading charges include regulatory cover to monetize Investor AuM
  2. The “Tech” layer -> our tech stack powers a Hedge Fund as a Service (Prime Broker, Front, Middle & Back-office technology) at 0 up-front or fix running costs

And here’s where you come in – for you to reap investor AuM, you must first seed TRUST.

How to source Investor AuM?

That’s precisely the WRONG question to be asking. Investor AuM is the outcome of a process fuelled by investor confidence – which is an asset you build one step at a time, in an endless manager tit for investor tat improvement loop:

  • Tit: Manager delivers performance (= builds trust)
  • Tat: Investors increase allocation (= rewards trust)
  • Repeat

Note that it’s tough to get going, but also investor AuM are so powerful because they beget a self-fulfilling prophecy:

  • the more investor AuM, the more revenue per unit of Alpha,
  • the more time & inner-confidence invested in your Alpha, the more robust your Alpha, the more AuM, repeat.

Like everything in life, the toughest step is not the last, but the first. When it comes to landing your first EUR/GBP/USD under management – note the infinite distance between

  1. Almost trusting = almost investing and
  2. not investing = not trusting

Introducing the DARWIN Check-out

The only way to overcome this chasm is layer by layer

  • One: De-couple your “manager” self from your “investor” self – which makes you your first investor in yourself. This is the first milestone in your Alpha Race.
  • Two: Every DARWIN is eligible for Darwinia, which lines you up nicely for the next Layer – Darwinex backs you with their capital, because you backed yourself
  • Three: Cherish your DARWIN, because it’s designed from the ground up to get you from
    • Your first 2 (yourself + Darwinia)
    • Your first 3 investor

That’s right.

If you want anyone to trust you, start by trusting yourself, do your best to deliver on that trust, and the rest will follow. This is the reason why Darwinex will expect you to back yourself first, before Darwinia backs you – and then you’ll have to leverage your Check-out to legally go pitch your Friends & Family: after all, if they don’t trust you, neither will anyone else in the world.

We hope you find this new feature interesting and please do give us all the feedback you can!