A Black Swan fund is an
investment fund
An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages inc ...
based on the
black swan theory
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on ...
that seek to reap big rewards from sharp market downturns. They became more known after the
financial crisis of 2007–2008
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
.
One example of a "Black Swan" fund is Universa, which was founded by
Mark Spitznagel
Mark Spitznagel (; born March 5, 1971) is an American investor and hedge fund manager. He is the founder, owner, and chief investment officer of Universa Investments, a hedge fund management firm based in Miami, Florida.[Nicholas Taleb
Nassim Nicholas Taleb (; alternatively ''Nessim ''or'' Nissim''; born 12 September 1960) is a Lebanese-American essayist, mathematical statistician, former option trader, risk analyst, and aphorist whose work concerns problems of randomness, ...]
.
During the 2007–2008 financial crisis the fund posted returns of over 100%. In August 2015,
Universa Investments
Universa Investments ("Universa") is an American investment management firm headquartered in Miami, Florida. It is known as a Black Swan fund that focuses on risk mitigation to protect investors from sharp market downturns.
Background
Univ ...
made more than $1 billion in profits in one week, representing a 20% YTD return.
References
External links
Risk mitigation at Universa
Investment funds
fund Fund may refer to:
* Funding is the act of providing resources, usually in form of money, or other values such as effort or time, for a project, a person, a business, or any other private or public institution
** The process of soliciting and gathe ...
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