Mitchell Ng ’16 and Edward Xiao ’16 founded a student-run investment fund that currently manages $150,000 in assets.
The investment fund, Thessalus Capital Management, focuses on exchange-traded funds and large market cap stocks to minimize risk and maintain a stable portfolio, Xiao said.
“It’s about balancing risk, some high risk and high reward, as well as long-term stable investments, such as healthcare and technology, as well as [exchange-traded funds],” Ng explained.
Ng said the two main goals of the fund are to generate positive returns and to beat the Standard & Poor’s 500 index.
If the fund is successful, over time Thessalus will increase risk by incorporating long-short strategies similar to those of a hedge fund, Ng said, adding that Thessalus will provide seed funding for start-ups on campus.
Seed funding is an early investment in a start-up that helps pay the initial costs of launching a company.
Xiao said his team is not confining itself to any one sector.
“We are doing what traditionally investment funds do, but at the same time we are taking on a portion that is somewhat like a venture capital business in that we are investing in very small companies like start-ups,” he said.
Devansh Gupta ’16, the chief executive officer of Wolfpak & Pack Inc., will receive seed funding for his start-up from Thessalus management.
Gupta's company, co-founded with Rutgers junior Felix Young, created a social networking app called Wolfpak that applies the anonymous social media concept of Yik Yak to photos and videos. Wolfpak aims to change the way users interact with their surroundings and to empower people at social gatherings, including hackathons, protests or sports events, so that people feel like one body, Gupta said.
Gupta said Wolfpak is one of the first investments Thessalus will commit to invest in over the summer.
“The capital we are receiving from the fund will go toward Wolfpak’s large viral marketing campaign in August, as well as maintenance costs,” Gupta said.
He added that his start-up is currently run on his savings, as well as Young’s.
“Photos and videos cost a lot more to host on the internet than words, which translates to huge amounts of memory,” he said."Once you start reaching a lot of customers, that is a lot of server costs to sustain."
Ng said that he decided to give seed funding to Wolfpak because he knows and trusts Gupta.Gupta said he met Ng at a summer camp in high school four years ago.
“When you are starting a new company, I feel there are going be roadblocks that you have never seen before,” Xiao said. “People who have known each other for a long time are people who are going to buckle down and face those roadblocks.”
Ng is also a founding partner of Think Ivy, a college consulting firm he started upon arriving at the University. Think Ivy, which has 20 employees and has worked with over 100 clients, gave him valuable start-up experience and quite a bit of money to invest, according to Ng.
Ng said the revenues and contacts generated from Think Ivy as well as contacts in the finance industry are two major contributors to Thessalus. In addition, Ng said he personally will be contributing six figures and may increase the amount depending on how successful the fund is.
“I think people trust us because we have a decent amount of knowledge and are realistic in our expectations. There are a lot of student-run funds in the country. One reason that we are the biggest is because we moderate our expectations,” Ng said.
Ng said the fund is collaborating with other top schools such as Yale, Duke, Columbia and MIT.
“One of the great things that can come out of collaboration with these other schools [is that], not only do you get a larger pool of talented people, but also people who are on a different schedule,” Xiao said."Trading cannot just revolve around our lives, so at any point, we need someone who is able to manage the company."
Both Ng and Xiao said they are interested in educating people to become their successors and ensure the long-term stability of management in Thessalus.
“We are looking for undergraduates interested in working as analysts, people who don’t have to contribute financially but have or desire financial experience and really want to learn,” Ng said.
Ng said the fund will also raise interest in investing by advising talented local high school students about investment strategies.
Brennan O’Connor ’18 said he will personally work for Thessalus as a partner.
Although courses offer good theoretical strategies for analysis among other benefits, classes can only get you so far, he said.
“You don’t actually get a lot of hands-on experience, and this is the way to go about learning in a way that is going to be very beneficial down the road in the real financial industry,” O’Connor said.
He said Thessalus will be performing industry analysis as well as industry research.
“One of the biggest risks about it is if we don’t do our research," O’Connor said."That’s when it becomes super risky, but we think that we have a good enough investment and analysis strategy that we can make strong investments and yield a very positive return.”
O’Connor said most group members are investing their own money into the fund.
“In terms of the specific dollar amount, that varies from person-to-person. Obviously that depends on what people can or are allowed to do, but everyone believes in it,” he said. “There’s no better way to learn than with your own money.”