(Communicated)
Dear Readers,
Up until two weeks ago, 99% of you had never heard my name. I’ve never been much of a public figure. My friends and family can attest that I typically spend most of my time reading annual and quarterly reports.
As you may have seen in our recent publications, BlackBird is only open to accredited investors with $250,000 or more. The average BlackBird client has a net worth well beyond ten million dollars. Needless to say, they are not investing novices and conduct plenty of proper research. Frankly, it is laughable that people with little-to-no business experience or success feel the need to do “due diligence” on behalf of our prospective clients. It is akin to a kitten defending an elephant.
For those who are truly of the means to invest in BlackBird, here is the process:
1. Call our office at (732) 884-1090.
2. We verify you are indeed an accredited investor.
3. We set up an appointment for a formal meeting.
4. We get together to discuss our fund’s investment approach.
5. After completing thorough due diligence, a decision is made on whether to move forward.
As someone with nearly a decade of experience in the finance industry, I have several thoughts on protecting clients from fraud. I believe the single most important tool available is a reputable third-party administrator, and here’s why:
1. The fund manager does not have access to transfer funds. When a new client is onboarded, the funds must be sent from the bank account to the prime broker. Only the administrator can initiate the wire. This leaves no opportunity for a fund manager to steal their clients’ capital.
2. The fund manager does not report his or her results to clients. The third-party admin sends the account statements, including a detailed overview of performance, directly to clients. This way, they cannot be tampered with by the fund manager.
In my view, this is the ultimate form of client protection. If such checks and balances had been implemented, the schemes that have recently come to light would have never had a chance to develop, and much damage would have been prevented.
While it is true that no nation’s people are more honest than Klal Yisroel, we are also instructed לושכמ ןתת אל – do not put a stumbling block in front of our friends. Needless to say, managing substantial resources on behalf of others can foster the temptation to misappropriate funds. I believe it is for the sake of the money manager as much as the client that the capability for wrongdoing be eliminated. It is my sincere hope that going forward, other investment firms within our community will follow our lead in implementing this important client-protecting measure.
In BlackBird’s case, we use NAV Consulting as our third-party administrator. They serve more than 900 funds that in aggregate manage more than $220 billion. Though I do not think it is my obligation to share publicly our contact within NAV for verification, I will do so below:
Name: Deepak Sethi
Email: [email protected]
In conclusion, I want to thank all of you for your incredible interest in our fund. For those that qualify, I’d like to personally invite you to reach out to our firm. For everyone else, I suggest you find a money manager that implements the same client-protecting measures that we do at BlackBird.
Judah Spinner, CFA
Chief Investment Officer at BlackBird Financial LP