David Hu and Aaron Mayer, founders and GPs of Open Heart Capital, a market-neutral, fully-automated, quantitative cryptocurrency hedge fund, have committed to donate a “large percentage” of the fund’s performance fee to “highly effective” charities.
Mayer and Hu, who met through the effective altruism community, a group of people who use evidence and data science to determine how to maximally benefit society through philanthropy have decided that much of the fund’s profits will be directed towards promoting global health via the Against Malaria Foundation, where a $2.50 donation can manufacture and distribute an insecticide-coated mosquito net that can prevent someone from contracting the offendedly disease.
The fund is almost entirely quantitative and algorithmic, blending a combination of arbitrage and mean reversion strategies to achieve risk-adjusted returns that contrast with the simple buy-and-hold approach of most retail investors. The fund is structured to withstand market fluctuations, and it has historically performed at its best during periods of high volatility and market uncertainty.
The algorithms were developed by Hu, an early bitcoin investor in 2011, alongside a team of quants at another New York-based trading desk who have a combined 30-plus years of experience managing billion-dollar funds in the traditional equities markets. The team’s newest short-only algorithm makes intraday trades that are only exposed to the market for an hour at most, allowing for quick entries and exits as opportunities present themselves based on the relative strength of different signals.