Students run ‘most exclusive’ hedge fund which manages $300k a year

World News

Members of the “most exclusive hedge fund in the world” are sharing how they make their money through investing.

In order to become a member of the “exclusive” fund, students need to be studying at the university and go through an admissions process.‌

The hedge fund was founded in 2012 and provides Harvard students with the opportunity to invest money and work alongside Wall Street giants.

According to its website, Black Diamond outperforms the S&P 500 “by an average of seven percent annually over the past years”.

Speaking to the New York Post, Jameson Cohen, director of member affairs, said the group manages around $300,000 (£239,517) at any given time.

Students said the admission rate to join the hedge fund is around five to 10 percent.

Mr Cohen cited that applicants must be referred to the organisation by current members and undergo two rounds of strenuous interviews.

The first interview for the application process reportedly tests out Harvard students’ technical and behavioural skills.

According to the sophomore, there is no right answer to the questions but applicants are tested on how they think of their reply.

He explained: “They’re sort of trying to see whether you think like an investor, whether you have the necessary technicals to move forward to the second round.”

When students are fortunate enough to get a second interview, they are challenged with their investing skills.

Harvard students will have to prepare a stock pitch, including a cash-flow analysis and an investment memo.‌

Mr Cohen added: “You’ll debate that memo … with two other interviewees and several interviewers.”

Many graduates take any money they make from the hedge fund once they graduate, according to the student.

However, some decide to leave it in the hedge fund for Harvard students in the future to invest in.

There are currently around 30 members who are a part of Black Diamond Capital, Mr Cohen said.

Part of the intrigue in applying to join the hedge fund is Black Diamond’s networking opportunities for graduates.

New members are added to the group chat which includes all past members since the fund’s founding.‌

This means that students have the chance to get themselves a foot in the door within the world of finance and investing.

Mr Cohen said: “Many of those people have gone on to work at some of the most desired firms.

“So they’re often able to let you know about deadlines or if there’s going to be someone on campus interviewing at some point soon.”

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