11% returns and a guarantee not to go negative is too good to be true IMHO. Nobody can get that return without risk. Even looking back in history, how could they invest it safely and get that?
You'd think Ponzi schemes weren't possible any more these days, but they are. They work because the investors are greedy - greed trumps carefulness.
What worries me is your description of your friend "moving to them". This means he put all his assets into one investment? That's flat out nuts.
Edit: Another common thing in fraudulent investment schemes is the "word of mouth" thing, where it isn't advertised anywhere and only invited people get to participate because the fund owner or whoever is running it is a superstar and too busy already making everyone a fortune.
G