- 1. What is Robin Hood?
- 2. Is it legal?
- 3. How do I become a member?
- 4. What is Robin Hood’s physical address and contact info?
- 5. Is there a minimum investment?
- 6. Is there a maximum investment?
- 7. Can I lose money?
- 8. What is the risk profile of the Robin Hood investment portfolio?
- 9. Can I lose more money than what I have invested?
- 10. What happens to my money if the Cooperative dissolves?
- 11. How can I get my profits out?
- 12. How do I sell my assets?
- 13. What about taxation?
- 14. Can I volunteer?
- 15. Is there a Robin Hood office I can visit?
- 16. Do members have meetings?
- 17. How does the voting for the cooperative decisions work?
- 18. What kind of projects is Robin Hood supporting?
- 19. Is Robin Hood an investment fund?
- 20. When is my money invested?
- 21. What are the costs?
- 22. How do I quit the coop?
1. What is Robin Hood?
Robin Hood is a new form of financial investment and organizing. We bend the financialization of today’s economy for the benefit of those, who are not the financial elite – that is us. We create profit and possibilities for our members and expand the commons by investing our profits into it. The cooperative benefits its members the more they are invested into it. Thus we ask members to please spread the word; everyone is welcome. Robin Hood is ours, yours and mine. It is our own investment cooperative.
Robin Hood has been described as an “activist hedge fund”, and although that is not entirely correct, it is a place to start, given four additional twists:
- First, we are a cooperative. Individuals become members and decide how the co-op is run. One member, one vote.
- Second, per the Robin Hood principle, part of the profit generated by the fund is invested into projects building the commons.
- Third, the money put into the fund is placed in the Wall Street stock exchange and crypto markets. On the stock exchanges we manage the coop’s assets with the help of an algorithm called “The Parasite”, invented and operated by Sakari Virkki.
- And fourth, we keep track of these assets on the Ethereum Blockchain, a revolutionary technology for decentralised computing.
2. Is it legal?
Yes. We are a registered cooperative in Finland. We operate under EU regulations and the Finnish law. In addition, we follow the rules of the Cooperative. We have a member selected board of directors, which monitors the operations of the Cooperative. We are audited by Ernst and Young. Have a look at the Finnish cooperative law and also our own cooperative rules.
3. How do I become a member?
In order to become a member, you have to pay the membership fee (currently 30 euros) and get your mandatory 30 euro share in the coop (giving you your seat in the general meeting and other membership rights and obligations).
4. What is Robin Hood’s physical address and contact info?
Robin Hood address is:
Street address: PO Box 10
Postal code: 33711
The best way to contact us is by sending an e-mail to email@example.com, and for technical support use firstname.lastname@example.org
5. Is there a minimum investment?
Yes and no.
Yes: In order to become a member you must send us a one time payment for the membership fee (30€), and pay for your coop stake (30€), so 60€ is a minimum.
No: Once you are a member, you can contribute to the coop’s “Robyn” assets with any sum you want.
6. Is there a maximum investment?
However, if you want to contribute large sums, its is a good idea to contact us beforehand so that we can facilitate the process.
7. Can I lose money?
Yes. The coop’s assets are invested in the stock market and and the market goes up and down. We did extensive simulations of our parasite algorithm from 2003 to 2011. During those years, the worldwide financial crisis hit hard, and our simulations still ended up profitable and beating the S&P500. It is the world’s most difficult index to beat; over 80% of all funds in the world lose against it. After years of great performance, we’ve also been through difficulties and lost funds. One should always be aware of the risk. Our algorithm is set to mirror the best investors on the Wall Street and if they are not making returns, we are not either. The first years of our operation we made big profit, but the fiscal year 2015-2016 brought us loss.
Since then, we’ve been also investing on cryptocurrencies that are highly volatile and members should be aware of the risk here too. When the market saw losses of around 80% in the winter 2017-2018, even if we’ve outperformed the general trend we saw loses too.
So there are very good chances for profit (we are for instance very confident about long term gains in assets such as Bitcoin) but bear in mind that this is risky business, and measure you risk and reward appetite before buying shares of the cooperative.
8. What is the risk profile of the Robin Hood investment portfolio?
The increase of risks is what characterizes the transition from an industrial economy into an economy based on knowledge and attention. How do you prepare yourself for something unforeseen, unpredictable, or potential? This question is in the core of Robin Hood, it is why Robin Hood was established. Robin Hood is about sharing the risks in knowledge work. We also constantly monitor Robin Portfolios’ risk parameters: the Sharpe ratio, Sortino ratio and Calmar ratio. For most of the time they have displayed excellent performance. However, it is important to understand that our risk level is never static, since we adjust it according to market situation. In traditional terms our risk level is high, since we are investing in stocks, but that is not the whole story. The Parasite pulls this risk level down considerably, by using the best expertise and every instrument. One could say our risk to the upside is higher than to the downside.
As of April 17, 2015, Robin Hood investment portfolio held a Sharpe ratio of 1.85, a Sortino ratio of 2.26, and a Calmar ratio of 7.60.
Sharpe ratio measures how well the return of an asset compensates the investor for the risk taken. When comparing two assets versus a common benchmark, the one with a higher Sharpe ratio provides better return for the same risk (or, equivalently, the same return for lower risk).
Sharpe: > 1 = good; > 2 = very good; > 3 = excellent. Sortino ratio measures the risk-adjusted return of an investment portfolio. It is a modification of the Sharpe ratio but penalizes only those returns falling below a user-specified target, or required rate of return, while the Sharpe ratio penalizes both upside and downside volatility equally. Sortino: > 1 = good; > 2 = very good; > 3 = excellent. Calmar ratio is an important statistic used to measure return vs. drawdown risk. It enables an investor to see the potential opportunity gain vs. opportunity loss of investing with a particular fund. Calmar: > 1 = good; > 3 = very good; > 5 = excellent.
9. Can I lose more money than what I have invested?
No. Even in the worst possible scenario, your liabilities are restricted to the amount of your investment. The coops assets, including your assets, are invested in US Dollars in stock exchange. If the stock exchange crashes and/or USD falters against Euro, you may lose money. However, we do take precautions and at times hold some or all of our investments on a bank account in Euros or Dollars.
Gains and losses depend on two major indicators 1. the value fluctuations of the stocks and 2. the value fluctuations in the euro/dollar conversion rates. Please note: Nothing is guaranteed. Past performance is not indicative of future results.
10. What happens to my money if the Cooperative dissolves?
Robin Hood Asset Management Cooperative is a registered company in Finland and therefore your assets in the cooperative are protected by Finnish laws. In the event that Robin Hood members decide to liquidate and close the Cooperative, all assets will be returned to members, paid out at their current value.
11. How can I get my profits out?
You can get profits of your assets by selling those assets (see 20. ‘How do I sell my assets?’).
12. How do I sell my assets?
The Finnish cooperative law regulates how your assets can be sold. Basically you have two options.
Option A. You can sell your assets to another member at any point on the internal secondary market.
Option B. You can sell your assets back to the Cooperative. Finnish co-op regulations state that we will need to wait until the end of the fiscal year (June 30th) to deduct your part of the Cooperative’s costs from the returnable amount. We do our best to estimate these costs every month, and they are already taken into account in the value of your of assets that you see on your member page. After we have cleared the exact amount to be returned to you, but by law we need to wait for 6 months until we are allowed to transfer you the monies. Thus, the first possible day to return the monies is end of December. We recognize and are frustrated about the slowness of the process, but it is regulated by the new Finnish cooperative law set in 2014. Our Cooperative functions under the Finnish Laws, and there is nothing we can do about the regulations.
To initiate the process of selling your assets back to the Cooperative, write us an email email@example.com.
13. What about taxation?
When you receive payments from Robin Hood, you will be liable for whichever taxes you would pay for investment income in your country of residence and/or Finland.
14. Can I volunteer?
Yes, please. We are eager to have you in and active! Check the forums.
15. Is there a Robin Hood office I can visit?
No physical office. Our management and admin team is spread in different locations. Most of our communication and a lot of our action takes place online. From time to time we also have face-to-face workshops. We call these our ‘offices’. They are often in new locations, and we invite everyone to them. If you would like to meet people from the office, there is also the chance someone is located nearby, so let us know of your interest by email to firstname.lastname@example.org .
16. Do members have meetings?
Yes, we hold meetings using virtual platforms. At least once a year we have the general members meeting, where the most important decisions are made. In 2017 we plan to do an extra meeting in June. The main platform for general meetings has been Loomio.org . During the meeting days discussion and decision making happens there. All members are invited and notified well in advance.
17. How does the voting for the cooperative decisions work?
Each member has one vote, no matter how much of the coop’s assets an individual member holds. When there is something to vote on, all members will be notified and given instructions on how to do it. We have typically used Loomio.org as the platform for our annual member meeting, but we have been using different virtual platforms for meetings, decision making, and voting.
18. What kind of projects is Robin Hood supporting?
Robin Hood supports projects that expand the commons and the public domain. For more information the funding process write to email@example.com.
19. Is Robin Hood an investment fund?
We are not an investment fund, let alone a hedge fund in the classical sense. We are a cooperative and manage the assets of the cooperative; assets contributed by the members. The cooperative also manages its assets by investing in the stock exchange.
20. When is my money invested?
Depending on the method used (credit card, bank transfer, BTC or Eth payment, etc.) it will typically take a few days before your funds are available in your wallet. After assets are allocated in the coop to manage, we will transfer them directly to fund management, and they will be invested.
21. What are the costs?
Robin Hood is a cooperative that seeks to maximize the return on shares to its members and to expand the commons. Because of its unique structure, the costs of the operation are very small compared to normal asset management offered by ordinary banks and their private banking. However, there are still costs. During the first year (July 2012 through June 2013), our fixed costs were approximately 11% of the amount of the assets under management. These costs included: data mining feed fees (to run the parasite), accounting fees, legal and bank charges, our accounting audit through Ernst & Young, and miscellaneous small expenses (web hosting, domain registration, etc). They were, in total, about 7000€ during the Beta Year. But the total profit generated was about 9000 in that year, which made the costs 77% of the total profit. As for the period since 2016 we have been having higher costs related to software development. For 2020 we will need 30.000€ to cover the regular and new platform development costs. Robin Hood is an operation with extreme scalability and efficiency. The more AUM we have, the better it works. Robin Hood strives to be the cost leader in the asset management business.
22. How do I quit the coop?
The process is simple: you e-mail to firstname.lastname@example.org saying that you want to quit the coop.
After the bookkeeping for the fiscal year (1.7. – 30.6.) during which you have quit has been closed, we will know the value of the shares returned to you. There is a 6 month regulatory waiting period after the value can be returned, so it will happen in January. (So, for instance, quitting in January 2020 means: books closed in 30.6. 2020, value returned in January 2021).