In 2007, Warren Buffett predicted that a Vanguard S&P 500 index fund will out perform five hedge funds selected by Protégé Partners. Protégé naturally disagreed, which led to a friendly million dollar bet among colleagues.
On December 31, 2017, the losing party will donate the sum of $1 million to a charitable cause of the victor’s choosing.
Buffett’s choice is the Girls Incorporated of Omaha, which opened in 1975. Protégé went with Friends of Absolute Return for Kids, Inc.
According to Forbes, the bet commenced 2008-01-01, between Warren Buffett and Protégé Partners, LLC (challenger), and stated on LongBets.org that: “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis netof fees, costs and expenses.”
Buffett, (Net worth: 77.6 billion USD, 2017 – Forbes), will not be emptying the bank if he loses, taking note that he is not using Berkshire Hathaway’s money, but only his own. Also, being the amazing philanthropist that he is, losing to support a charity would be his pleasure. If Protégé turns out being the ones to pay, they have already benefited greatly from the exposure allocating to their bravery in daring Mr. Buffett. Goes to prove, doing something which in the end will help others, is the only way to become champions.
Girls Incorporated of Omaha is a nonprofit organization in the U.S. based in New York. They aim to inspire all girls to be “strong, smart and bold.” They serve girls, creating a vision for a bright future, and provide the experiences and opportunities to help. The organization equips girls with the skills to navigate through economic, gender, and social barriers and to grow up as independent individuals.
Ark, formerly ARK (Absolute Returns for Kids), is an international children’s charity based in London, U.K., founded as Absolute Returns for Kids in 2002. They serve to improve the life chances of children, by creating high returns on philanthropic investment. Ark’s programs and goals focus on Health, Education and Child Protection and claims to apply sound business disciplines to all its programs.