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Hedge Fund Veteran Michael Wang Likens His New Venture to FinTwit — Without the Noise
Prometheus, backed by Peter Thiel and others, is a platform to connect alternative managers with allocators.
Michael Wang thought there was a need for a social media investing platform that was the opposite of WallStreetBets.
People like Peter Thiel agreed and backed him.
Last year, Wang, a veteran of Steve Cohen’s Point72 and Robert Day’s Cypress, raised $5 million in seed funding for Prometheus, a social marketplace he designed to connect alternative managers with mainstream and institutional investors. Last month, Prometheus sent out its first exclusive invitations for users to join the app.
The platform is designed to answer two questions Wang was always asked: How are the markets doing? And how do I invest in alternatives?
The app is also Wang’s response to the small number of well-known managers, including one on Wang’s resume, that dominate fund flows, even though there are nearly 15,000 competitors in the alternatives market.
“[Investors] go to Bridgewater, Citadel, Point72, Sequoia, Andreessen Horowitz, which basically leaves the other 14,950 funds fighting for the scraps,” said Wang, who joined Jason Karp at his long-short equity hedge fund Tourbillon Capital Partners after Point72 (the firm was still SAC Capital when Wang was there). Although Wang is exaggerating, it’s true and getting worse. The biggest allocators think it’s a headache to deal with too many managers, even though smaller shops can offer benefits — sometimes even better performance.
Prometheus is Wang’s first pure technology venture. But he has a history of building investment management businesses and working with some of the biggest names. After Tourbillon, Wang took his skills to Los Angeles, where he became co-managing partner with Robert Day at the Cypress Funds, one of the oldest hedge funds still in existence. Day, who founded TCW in 1971 and is the grandson of Superior Oil Co. founder William Myron Keck, introduced Wang to other big players in the investment world.
“I had a great experience working with Robert because his best friends are people like Michael Milken, Steve Wynn. I’ve had dinners with Charlie Munger. This is a legendary group of people,” Wang said. Institutional Investor recognized Wang as a Hedge Fund Rising Star for his work at Cypress, where he spent five years before launching Prometheus.
Charlie Munger’s occasional dinner companion now is hyper-focused on the barriers for smaller managers. During a demo of the app for Institutional Investor, Wang showed a user Prometheus’s interface, which consists of a social feed and a marketplace. Users are encouraged to post investment insights on the app’s Twitter-like news feed — only devoid of political and other chatter.
The idea is to help easily-overlooked fund managers, those that are still considered emerging or have less than $1 billion in assets, build a platform and rapport with investors through the content they post.
“I really wanted to build a platform to…allow managers the ability to build their brand, build their business, build their following and raise assets on our platform,” Wang said.
Managers can create a personal account or company page that users can visit to access their content, which can be searched by topic, including technology, healthcare, specific asset classes, and cryptocurrencies.
Some users, say fund managers or sell-side analysts at Goldman Sachs, garner the distinction of a “pro badge” — the Prometheus-equivalent to Twitter’s blue checkmark. When a pro posts content, it loops to the top of users’ feeds.
“[That’s] literally the total opposite of WallStreetBets, Stocktwits, and Twitter,” Wang said. WallStreetBets is a Reddit forum that was central to the GameStop and meme stock meltdowns.
As Wang scrolled through the updated feed, names like Jose Torres, chief investment officer at Lokoya Capital, Jim Rocchio of Kailash Concepts, and Alex Beinfield at Blue Duck Capital appeared with pro badges and tweet-style meanderings on the state of alternative investing. Other users include Christopher Blum, the former global head of equities at JP Morgan Wealth Management and Jeff Dorman, CIO at Arca.
While the social side is open to anyone, only accredited investors are able to invest in the platform’s marketplace. For fund managers to access the marketplace, they have to undergo a due diligence process conducted by Prometheus.
“If you’re a small-time manager and you don’t yet have that track record to come onto our marketplace, go ahead and start pushing content, build exposure for yourself, build a following, connect with allocators on the platform,” Wang said.
Users with access to the marketplace can click a star icon next to the fund’s profile to add it to their watchlist. Wang said users can also do research by accessing the manager’s marketplace profiles, which include investor letters, performance reports, team files, and monthly returns.
If qualified users decide they want to invest with a manager, Wang said the process is relatively seamless. While most of the industry still processes paper transactions when they want to invest in a venture or hedge fund, Prometheus has investors fill out one document, which it then uses to create an “investor passport.” The passport then auto-populates investor information into any other necessary documents moving forward.
Prometheus also includes a chatting function, which fund managers can use to talk to their existing investor bases more frequently than in a quarterly letter.
“Think of this as a free version of Bloomberg chat,” Wang said.
Prometheus is currently only available on an invite-only basis. The first round of invites went out a few weeks ago. Wang said the idea is to launch “slowly and thoughtfully” to a small population at first in order to work through any issues or bugs in the app before it becomes available to a wider customer base.
For now, he’s focused on the big picture.
“Think of this as Facebook, but built from the perspective of Wall Street fund managers, allocators, investors, etcetera,” Wang said.