He is on a mission to make investing cool. James Perkins Jr., the founder, CEO, and portfolio manager of Thrasher Funds, a New York City-based equities investment firm, wants to prove to members of Generations X and Y that investing should be a part of their repertoire-and that it can be fun.
Last October, the 3-year-old firm launched the GendeX (GENDX) fund. Thrasher’s online marketing strategy aims at being relevant to a new generation of investors- using MySpace and Facebook because that’s where young people make connections. Even Thrasher’s Website hypes up the hip factor by showcasing a crowd of fashionable young people. Trendy soul music plays in the background and a message reads: “They invest. Do you?”
Prior to the launch of the fund, Thrasher ran a hedge fund and acted as an investment advisory business providing research about Gen X and Y to its clients. “There is no reason why investing can’t be sexy. There is no reason why it can’t be fashion-forward,” says 29-year-old Perkins, a former analyst for ZBI Equities (Ziff Brothers Investments), a private hedge fund.
Perkins bases his rationale on what he calls the “demographic convergence thesis.” Young people are making more money than they used to, he explains, and baby boomers want to become ageless. “Older generations and younger generations are starting to converge,” he says, citing the similarities in the way the two demographics dress, use technology, and spend their leisure time as examples.
Perkins and longtime friend Khalid Reede Jones, the COO and general counsel of Thrasher Funds, had been pursuing the idea of an investment firm geared toward young people for years.
In the summer of 2004, the pair co-founded Prism Investment Equity Partnership (PIEP), a not-for-profit investment partnership, to urge young Manhattan residents to participate in equity markets. At the time, both Perkins and Jones, also 29, had other jobs, making them unable to turn PIEP into a full-time business. The partnership dissolved the following year.
The GendeX fund, initially seeded with $100,000 and receiving new investments almost daily, offers an initial investment package for as low as $100, so long as investors sign up for a monthly $50 automatic debit plan. Its three largest stock holdings include luxury handbag maker Louis Vuitton, biofuel producer Archer Daniels Midland Co., and fashion retailer American Apparel. Since its inception in October, the fund was down -1.60% by the end of ’07 versus a 2% drop in the S&P 500 during the same time period.
But with a marketing strategy geared toward young people, does Thrasher risk the danger of its clients outgrowing the firm? Yes, says Jones, but as its shareholders grow, there will always be a new crop of young people who want to be engaged. Besides, the firm does not discriminate, say Jones and Perkins. It welcomes investors-young and old-who want to see money management go in a different direction.