One student group at Harvard demands a lot more than a comp. To join Black Diamond Capital Investors, a student-run investing club at Harvard, prospective members must buy in at least $1,000.
“Black Diamond is all about taking investments to the next level,” said Patrick M. Colangelo ’14, who founded the club last semester. He said that the mandatory minimum investment exists to ensure member engagement in the group, which is limited to 25 participants.
"We select experienced finance students who are willing to put up the minimum capital contribution because we seek partners who will be vested in the operations and performance of the fund," Colangelo said. "It really gets the most out of our partners.”
Member Arash Alidoust ’13 said he believes the buy-in is critical to the success of Black Diamond, which claims to be Harvard’s largest private growth fund. “It makes you much more concerned and much more innovative,” Alidoust said. “Black Diamond becomes part of your life.”
Members said that Black Diamond’s investment strategy differs significantly from that of other financial groups on campus. Like the hedge funds it emulates, Black Diamond is a riskier investment than some of its peer groups, a risk which members hope will be rewarded. Colangelo said that the organization is aiming for a 30 percent return on its investment.
The 25 members each invest up to $20,000 into the club. These members make up the general partnership, which makes joint decisions on investment strategies and shares equally both the rewards and the losses. In the past week, Black Diamond has sent emails inviting students to seek a spot in the group over several finance-oriented listservs, the first time that the group has solicited applications rather than recruiting individual members by referral.
The email said that interested students should submit their resumes and expect an interview.
In addition to its general partners, Black Diamond also boasts an advisory board consisting of professionals in the business and academic world.
While Paul H. Farber ’13, a member, recognized that the minimum buy-in requirement might prevent some from joining the club, he said that there are many other opportunities for students to get involved in investment on campus.
Colangelo said he started the club in order to bring together people from a wide variety of backgrounds interested in finance.
“What Black Diamond has been created for is for investors who have a little bit of experience, joining a group of other experienced individuals who really want to do something different,” Colangelo said.
Alidoust said that the strength and diversity of Black Diamond’s team of investors allows the club to break out of the typical “framework” of investing.
“We encourage innovation and new ideas about investing, rather than just sticking with the old ideas,” he said.
Members stressed that as much as Black Diamond is focused on earning money, it also aims to educate its members.
“Our number one priority is to create an environment where people can learn and are engaged,” said Farber.
—Staff writer Mercer R. Cook can be reached at email@example.com.