This post briefly describes the role, set-up and current priorities of the Investment Committee.
The main ongoing goals of the Investment Committee are simple:
- maximize the return obtained on the assets in the Capital Pool,
- while minimizing associated risk.
The Investment Committee participants aim to iterate on the Investment Philosophy of the mutual.
An updated Investment Philosophy has been put forward, this document should be used as a framework to evaluate potential investments, alongside any unique features specific to the potential investment.
The Investment Philosophy contains:
- The objective and main considerations of the philosophy
- A description of the risks to which the mutual is exposed when investing its Capital Pool
- A method for splitting investments into different risk buckets
- Specification of the intended allocation between those risk buckets (Risk Budgeting)
- The target return and risk tolerance threshold for the investments
The Investment Philosophy is a living document which we expect to update and maintain over time as the circumstances of Nexus Mutual and the universe of possible investments changes.
Drafting, Submitting and Reviewing Investment Proposals
The members of the Investment Committee look to identify investments or managers that fit with the strategy of the mutual across the risk spectrum, perform due diligence and put forward proposals for investments.
However, the committee participants are not and should not be the only source of investment proposals and we hope that members continue to actively seek out appropriate investment assets for the Capital Pool. The investment committee can then provide feedback and commentary on any investment proposals put forward by members.
We aim to act as the first point of call when members have a well thought out proposal for an investment that fits in with the strategy and are looking for advice, challenge and input before submitting the idea to the wider membership base. Please feel free to reach out to us in private if you have a proposal you’d like to discuss & refine before posting on the forum.
Interaction with the Nexus Mutual Team
Rei currently acts as a liaison to the Nexus Mutual team to discuss proposals and determine the viability of implementation, as well as aiding in translation of proposals into technical requirements for the engineering team.
We maintain a direct line of communication with the foundation team and other DAO teams to both request their assistance and provide our skills on an ad-hoc basis as appropriate.
The Investment Committee was originally formed in late 2021 as the “Investment Hub” - then the second team that sat fully within the Nexus Mutual DAO.
It consists of Nexus Mutual community members who dedicate part of their time to exploring options for investing the Capital Pool of Nexus Mutual into productive assets.
The community members within the committee who are not otherwise full-time contributors to Nexus Mutual get compensated for their time as per the DAO team funding.
The current active members of the Investment Committee are @rei, @osaat, @gauthier and @nsantini
Due to the state of the market and the preference for members to be long-ETH in the short term, the main focus of the committee members is on ETH-denominated investments, especially ETH staking.
We would advise members against submitting USD-denominated proposals at this time as they are unlikely to be successful without a broader change of asset exposure in the Capital Pool.