Another Way to Occupy Wall Street? In this exclusive interview, former Goldman Sachs Vice President Raphaelle Chappe introduces us to Robin Hood 2.0, an "activist hedge fund" that's trying to de-privatize finance and build an alternative economy. Could finance capital really be used to redistribute power and resources and not just to amass private wealth?
Laura Flanders: That's a glimpse of a video made by Robin Hood media, about a project in the financial world that's being called another way to occupy Wall Street. It's an activist hedge fund if you like, using financial technology to democratize finance. Raphaële Chappe, a former VP of tax law at Goldman Sachs is now the co-founder of a suite of investment tools under this Robin Hood banner. Could finance capital really be used to redistribute power and resources and not just to amass private wealth? Perhaps. Raphele, tell us a little bit about what we just saw. There's a London office of this Robin Hood operation, what are we looking at?
Raphaële Chappe: We have an algorithm, we call it the parasite. What it does is, it replicates the investments of what we consider to be insiders in Wall Street. We form a portfolio that replicates those investments, and so far we've gotten great returns. I think last year was 40% return, which made it the second hedge fund in the world. Of course, it's a little bit of impertinence. We're trying to hack it, derail it.
Laura Flanders: De-privatize all that private information about the markets.
Raphaële Chappe: Sure. I think that it's just a very small dent if you think about all the types of strategies out there that hedge funds are using to make investments. We're basically mimicking a very small segment. There are things that we cannot track, or trace. High frequency trading, for example. You have hundreds of trades happening every minute, we wouldn't be able to do that. We do our best to hack it with the tools we have.
Laura Flanders: Are there things you wouldn't invest in that they're investing in?
Raphaële Chappe: They're taking a very ethically blind approach. If a company that manufactures weapons is a good investment, we invest in it. I might have my own reservations, but other than that sure.
Laura Flanders: To replicate the budget, and replicate the pattern the investments generate some profits and returns for your members, but then do some different things with them.
Raphaële Chappe: What we do is we re-invest a portion of those profits, and we actually use that to fund peoples art projects. People who would not normally have access to finance, to get funded for their product. That's a separate side of Robin Hood.
Laura Flanders: You are putting more money into some industries we talked about armaments, that we don't want more money in.
Raphaële Chappe: Sure, and that's what's driving our efforts to actually move into Robin Hood 2.0. Robin Hood financial services, where we try to take the positions that, "Hey we need alternative financial assets." We need to have individuals, small businesses, start-ups need to be able to issue their own securities, and that's something we would want to invest in. Right now we're still trying to create those markets. We're trying to create a platform where people could go on, engineer their own capital structure. Issue securities, and we would try to connect those people with investors. Of course we have to work around issues of transparency, how to build trust. Essentially we want to power alternative financial markets. To help the general public both on the investor side, and on the issuers side to use those tools to create an alternative, parallel economy.