How an Iranian Kurdish refugee started a “mysticism-driven” hedge fund trading as God would

The Thinking Man

I spoke to Salman Enferadi on a cloudy September afternoon in London. A Kurdish refugee from Iran, based in the UK, he had just started a hedge fund, Solomon Fathers. I had closely followed his journey on LinkedIn and was keen to learn more about how his experiences as a refugee had shaped his vision for this start-up.

Solomon Fathers is a climate finance and sustainability driven hedge fund. What struck me most was that Salman described it as a “mysticism-driven investment house”. This in itself, is poles apart from most other hedge funds’ data or numbers driven approach. The key question driving it is, “How would God trade if He were a trader?”.

One of the key aims of this hedge fund, is to try and generate the massive funds required for the green transition. At present, according to the UN, developing countries may need a minimum of $6 trillion by 2030, to be able to fulfil less than 50% of their existing climate goals. Public funding is likely to cover only 20% of this sizeable goal.

This makes raising private funds a crucial part of the green transition, which is what Solomon Fathers attempts to do, keeping climate goals at the core of its operations As Salman points out quite plainly, if the planet was a bank, it would have been saved already.

To achieve this, Solomon Fathers employs a rather unconventional strategy. Instead of trying to carve out a place amongst the traditional hedge funds which were buying and selling, it has created its own niche by using top and bottom picking.

This strategy usually involves picking an asset and going short at what you think is the highest price point, or the top, as well as going long at the lowest price point, or the bottom.

Although certainly an innovative strategy, with very less competition, top and bottom picking has attracted a lot of controversy, with several experienced traders, analysts and even textbooks advising against it.

This is because it’s often very hard to be exactly sure when the highest or the lowest price of an asset has been reached. As a result, making a move too early could potentially cause significant losses.

Throughout our conversation, Salman highlighted the philosophical principles Solomon Fathers was based upon, having read over 200 books about the subject and being particularly inspired by Indian philosopher Jiddu Krishnamurti’s ideas.

When I asked Salman how he planned to manage risk for his investors, he highlighted that this question was at the core of his investment philosophy. “We believe that managing risk is fundamentally flawed. Attempting to manage risk is like trying not to think - the very act of trying not to think is, in fact, thinking.

Similarly, attempting to manage risk is itself risky. We don't engage in risk management; our approach is centred around preventing risk, which we consider to be wisdom. This is why we are confident in our ability to identify market tops and bottoms rather than simply buying and selling.”

Coming to the holding time for investments, Salman believes that “We don't adhere to conventional timeframes because we see time as a construct of thought rather than a concrete reality. Instead, we operate on a scale that we believe the universe follows.

We observe the markets based on this scale, and our trading and investment targets are aligned with it. While, in chronological terms, it may take around 1 month for a trade to reach its target on our investment scale, we don't restrict ourselves to fixed timeframes.

Solomon Fathers employs a strategy known as the Terra Investment Strategy. Although drawing mostly from philosophical rather than economic principles, the Terra strategy will also leverage compound interest as a means of delivering returns to investors.

The idea is to be as forward thinking as possible, since climate change problems are evolving so fast, while cutting down reliance on past data and preventing risk to the extent possible.

However, Salman emphasises that the hedge fund is an outlier and is therefore not everyone’s cup of tea, due to the unconventional investment strategy and guiding philosophy. He is also extremely transparent with the fact that past data and performance metrics are limited, due to it being a very new hedge fund in a relatively niche segment.

Having fled from Iran, Salman arrived in the UK in 2019, alone, leaving his parents behind, knowing hardly any English. At the time, Iran was going through perhaps the most violent and widespread series of nationwide civil protests since the 1979 Iranian Revolution, sparked by a steep increase in fuel prices. This also led to a week-long nationwide internet blackout.

When I asked more about what made him leave Iran, he says that living in Iran is like “free in a cage”. While one may be able to say or do anything freely at a certain point, there is always the risk of being arrested, detained or executed for the same later on.

He also mentions how the current regime in Iran goes out of the way to stamp out dissent, mainly through the use of propaganda using the national broadcasting systems. Iranian Kurds, much like Kurds in Turkey, are a severely prosecuted race.

“Being a Kurd in Iran is the first sin you commit. We are seen as a sinful race. Since our birth, we are actively discouraged and prevented from speaking our own language or practicing our culture or religion. We are forced to learn to speak, write and read Persian (Farsi). Everything we do, as part of our normal daily life, can potentially be seen as a political act, or an act of rebellion or dissent. Wearing Kurdish clothes, or dancing in a Kurdish way can all be seen as political acts.”

“A lot of people think that Kurds want independence, or their own nation, Kurdistan. But what most Kurds actually want is the same rights as a person in Tehran or in Shiraz. I strongly believe that down the line, this new generation of young Kurds will be instrumental in toppling the current regime, simply because as a Kurd the first thing you are taught is to be resilient, and to never give up.”

“As refugees, we willingly choose a boat over the sea, or a freezer in a truck going towards the unknown, over a warm house in our homeland. You can imagine the kinds of situations which forces us to make such choices.”

For Salman, 2019 brought a similar choice. The next three and a half years would be spent fighting to receive refugee status and leave to remain and work in the UK. Amidst the many challenges were homelessness as well as having to survive on £5.5 a day for 1250 days, however never letting them break his strength of spirit and determination to survive.

Looking at him now, one may never guess the struggle he has faced. Besides being impeccably well-presented, he now speaks fluent English and is very well-read, with a gentle demeanour.

One of Solomon Fathers’ driving missions is for Salman to be able to give back to the environment, as well as the UK, which welcomed him with open arms during one of the most vulnerable times of his life. He also hopes to be able to provide more opportunities and a safe space for refugees like himself, in this way.

“We as refugees, know we are seen as the problem in many countries. But unless we are invited to the solution table, we cannot change the situation. Climate change is something that affects all of us and we can only deal with it together, by investing in ourselves, in our own planet, since there’s no planet B.”