Our Hedge Fund
Lean, Focused, and Built to Scale
My dear fellow Hermits 👋
On April 4th, 2025, we officially received regulatory approval to launch our very own fund.
We've made it after a year of intense negotiations, countless hours of paperwork, and unwavering commitment.
We want to take a moment to sincerely thank everyone who contributed to making this vision a reality.
Welcome to a new era… the era of...
EQUITY FOCUS FIL
by Hermit
Accountability
Before we jump into our usual bla bla, we want to highlight two key concepts behind why we do what we do. In our view, the most important thing you can ever do is clarify the “why.”
So, why do we now have a fund?
Two reasons: accountability and executing our vision.
We have a clear path: getting from point A to point B. The most efficient way to travel that path is through a low-cost vehicle like FIL. Along the way, we want to take charge, build long-term relationships, and prove, to both the world and ourselves, that this whole thing works. To do that, we need transparency.
You can now track our audited performance month by month. We’ve got an ISIN code, which you can simply Google.
ES0131237002 — Institutional (Class A)
ES0131237010 — Everyone else (Class Y)
A few platforms will summarize our returns and key stats. Admittedly, some of those summaries are pretty “meh” , but no matter what they say, the NAV (Net Asset Value) is consistent across the board. And NAV is what tracks performance.
For the observant among you… yes, the share classes are my initials. And yes, that was very much intentional.
Beyond the vanity, the share classes actually serve a real purpose.
One of the few drawbacks of this structure is who can get involved. Traditionally, only investors with €100,000 or more could participate. But with the introduction of two share classes, we’ve created a path for investors with as little as €10,000 to come on board.
I’d call that an upgrade.
Now, with lower minimums come slightly higher fees, a side effect of EU regulations designed to “protect the little guy.” These rules add complexity (and cost).
So, thanks Brussels!
[Rant over]
Regardless, this is by far the lowest-cost and most robust vehicle we could find.
And believe you me, we did our homework.
We explored dozens of jurisdictions around the world, negotiated with 14 banks, and spoke to 5 different investment advisory firms before landing here.
Investment Philopshy
We’ll keep it brief:
We’re war journalists — minus the getting shot part.
Our job is to uncover information by getting our hands dirty. We dig through the noise to build a differentiated view from the rest of the market. And when we build enough conviction around an idea, we act decisively.
We’re betting on the future version of companies, mostly under €2 billion in market cap, with the goal of holding for a decade. In practice, that often translates to being a friendly but discerning investor for at least three years (historical average).
We’re not looking for the next Apple.
We’re not chasing revolutionary ideas.
We’re not venture capitalists.
And no, we don’t have an army of analysts, drones, or corporate spies.
We put capital to work in situations with an edge — typically monopolies or oligopolies operating in niche, overlooked markets. These are businesses that are:
Already profitable, or clearly on the path to profitability
Structurally resilient (think: low or intelligently structured debt)
Run by people we can trust and reach… the CEO is one call away
Right now, this is a one-man show, and frankly, that’s enough. The strategy doesn’t require more than 3–5 people, no matter the AUM.
That said, we’re aware this approach loses its edge north of €100M. We’ll deal with that when we get there.
For now, expect compounding from a focused portfolio of 15–25 publicly listed names, plus a few cash-alternative positions.
If you want a deeper dive into how we search, analyze, and invest in these companies, you can start here:
Key Characteristics
Investment Guidelines
A minimum of 75% of the fund must be invested in equities from OECD countries at all times
Up to 25% of the fund can be invested in bonds with a credit rating of BBB- or higher
Up to 10% of the fund may be allocated to emerging markets
Up to 10% of the fund may be allocated to ETFs
The fund may borrow up to 10% of its AUM for short-term or transitory operations
Beyond these parameters, we have broad flexibility to invest across both public and private markets, with no material restrictions on concentration, liquidity, or geographic exposure
Advantages
Favorable Tax Treatment: Capital gains are taxed at only 1%, provided the assets remain within the investment vehicle.
Official Track Record: We maintain a transparent, independently audited performance history, ensuring credibility and accountability.
Collective Bargaining Power: By pooling assets, we enhance our negotiating leverage with service providers and counterparties.
Shared Economies of Scale: As assets under management grow, costs per unit decrease, improving overall efficiency and returns.
Disadvantages
Minimum requirements: Participation is limited to investors who meet specific eligibility criteria and can commit a minimum investment of €10,000.
Liquidity management: Although the structure provides substantial benefits, it also introduces certain operational considerations:
We are subject to investor redemptions, which require active liquidity planning.
We must maintain a minimum 1% cash buffer at all times to meet potential outflows.
A Few Key Notes on Structure
As mentioned earlier, we’ve created two share classes with one simple goal: to allow retail-style investors to participate, without compromising on structure or quality.
This is one of the most pro-investor structures available today. Traditional banks and financial institutions hate vehicles like this, because they shine a light on the absurd fees those players charge for doing very little.
We’ve designed the fund with investor protection and flexibility in mind:
It includes a high-water mark, so performance fees only apply after you recover prior losses
You can enter the fund once per month, when the NAV is published
You can exit on the same monthly schedule, as long as you provide 20 days’ notice. (This is important, as some of our positions can be illiquid)
There are no lock-up periods, no gate-in, and no exit penalties
We’re pretty sure your bank won’t love this setup, because their products don’t stack up well against it.
We see this as a clear differentiator from most traditional fund structures.
Fee Structure
We’re also going against industry norms by minimizing fees, especially the infamous AUM fees (fees for just holding your money).
While the industry standard is 1.5–2.0%, we’re starting at 0.85%, with a milestone-based agreement decrease it gradually to 0.45%. Every single cent of that reduction goes back to the investor, not to us.
Here’s the breakdown:
🔹 Class A — ISIN: ES0131237002
Minimum Investment: €200,000
AUM Fee: Starts at 0.85%, scales down to 0.45%
Hurdle Rate: 4%
Performance Fee: 20%
🔹 Class Y — ISIN: ES0131237010
Minimum Investment: €10,000
AUM Fee: Starts at 1.35%, scales down to 0.70%
Hurdle Rate: 4%
Performance Fee: 20%
Just to be fully transparent: I personally receive 0.2% of the AUM fee, regardless of scale. The remainder is allocated to required costs, including custody, banking, audits, compliance, and other expenses.
The only fees that exist are those listed above.
No redemption fees.
No entry fees.
No maintenance.
No transaction fees.
No admin charges.
No hidden legal or audit surprises.
We share profits 80/20 after a 4% hurdle, which we believe approximates the risk-free rate.
In addition, we’ll be progressively liquidating our personal portfolio and reallocating the proceeds into the fund to ultimately invest at least 80% of our net worth alongside you.
Both of these keep incentives fully aligned… you do well, we do well.
If you’d like the full details, here’s the official document (in Spanish):
The fund is currently available to any bank using Inversis as its depositary (Andbank, Banca March, Banco Caminos, Mediolanum, etc.) and through the Allfunds platform.
Questions? Just reach out, happy to chat.
Sweet ! Great job Yela 🥳 congratulations
Low fees, no bloat, skin in the game, and an investment thesis that doesn’t involve chasing dreams or buzzwords. It’s lean, it’s clean, and it just might eat the lunch of half the overpriced “wealth management” clowns in Europe.