Advice On Starting Offshore Fund In Caribbean

archeolog108

archeolog108

Hi,

Me and my business partner have 10 years of market experience. For 3 last years trading we are making 50-60% profits a year with minimal drawdowns on our small 400k USD account at IB. We also run our own companies not connected with finance.

We are in our at our 40s and we are thinking of scaling up our trading operation and sharing our profits with investors. Since we don't have connections in investment banks in USA and no millions of dollars required to run a hedge fund in USA or Europe, we are thinking of setting up incubator fund in BVI, which is cost effective. I know we will not be able to market to US investors and possibly not EU investors after MIFID II, but still a lot of investors left in the rest of the world.

We are planning to run this fund in minimalistic way (off sourcing operations, legal, accounting, no flashy offices, etc.) and see if after 2-3 years of heavy marketing/sales efforts, we will get any clients. I know getting clients is most difficult thing in this business so we would focus mainly on this, but incubator fund requirements need only 20k USD as minimum investment.

I would like to ask for advice or tips of anybody who is experienced in offshore fund space. What are the traps to watch for and what to focus on when starting such fund and getting clients?

I am pretty sure a lot of travel for live meetings around the world would be needed.
 
archeolog108 said:
Hi,

Me and my business partner have 10 years of market experience. For 3 last years trading we are making 50-60% profits a year with minimal drawdowns on our small 400k USD account at IB. We also run our own companies not connected with finance.

We are in our at our 40s and we are thinking of scaling up our trading operation and sharing our profits with investors. Since we don't have connections in investment banks in USA and no millions of dollars required to run a hedge fund in USA or Europe, we are thinking of setting up incubator fund in BVI, which is cost effective. I know we will not be able to market to US investors and possibly not EU investors after MIFID II, but still a lot of investors left in the rest of the world.

We are planning to run this fund in minimalistic way (off sourcing operations, legal, accounting, no flashy offices, etc.) and see if after 2-3 years of heavy marketing/sales efforts, we will get any clients. I know getting clients is most difficult thing in this business so we would focus mainly on this, but incubator fund requirements need only 20k USD as minimum investment.

I would like to ask for advice or tips of anybody who is experienced in offshore fund space. What are the traps to watch for and what to focus on when starting such fund and getting clients?

I am pretty sure a lot of travel for live meetings around the world would be needed.
More...

Have you ever traded other people's money? If not, then I recommend you first make that happen, even on a small scale, before making a big move offshore.

In terms of psychological stresses and barriers, the jump to trading OPM is every bit as big...if not bigger...than initially trading for yourself.

A journey of a thousand miles starts with one step.
 
lindq said:
Have you ever traded other people's money? If not, then I recommend you first make that happen, even on a small scale, before making a big move offshore.

In terms of psychological stresses and barriers, the jump to trading OPM is every bit as big...if not bigger...than initially trading for yourself.

A journey of a thousand miles starts with one step.
More...

Yes, we are already managing some small accounts for friends for about a year.
 
archeolog108 said:
Hi,

Me and my business partner have 10 years of market experience. For 3 last years trading we are making 50-60% profits a year with minimal drawdowns on our small 400k USD account at IB. We also run our own companies not connected with finance.

We are in our at our 40s and we are thinking of scaling up our trading operation and sharing our profits with investors. Since we don't have connections in investment banks in USA and no millions of dollars required to run a hedge fund in USA or Europe, we are thinking of setting up incubator fund in BVI, which is cost effective. I know we will not be able to market to US investors and possibly not EU investors after MIFID II, but still a lot of investors left in the rest of the world.

We are planning to run this fund in minimalistic way (off sourcing operations, legal, accounting, no flashy offices, etc.) and see if after 2-3 years of heavy marketing/sales efforts, we will get any clients. I know getting clients is most difficult thing in this business so we would focus mainly on this, but incubator fund requirements need only 20k USD as minimum investment.

I would like to ask for advice or tips of anybody who is experienced in offshore fund space. What are the traps to watch for and what to focus on when starting such fund and getting clients?

I am pretty sure a lot of travel for live meetings around the world would be needed.
More...

Hello, even If I do not understand why to manage OPM with all the implications and moral questions, I put a like for you and your partners constant profit, your new adventure and wishing you all the best.
Being a victim of the scam in the Bahamas I can assure you that BVI, British territory, will most likely not hide bad surprises. However it is always better to check with the Bar Association http://www.bvibar.org/ if your agents are active members and to verify their credibility.

As for your clients to be - certainly there are many people out of USA and EU in need of this service. Russia and ex-USSR countries, for example. Many are bringing money to Switzerland, just to receive nothing and to be locked out of normal trading and real investment opportunities.
 
Last edited:
CSEtrader said:
Hello, even If I do not understand why to manage OPM with all the implications and moral questions, I put a like for you and your partners constant profit, your new adventure and wishing you all the best.
Being a victim of the scam in the Bahamas I can assure you that BVI, British territory, will most likely not hide bad surprises. However it is always better to check with the Bar Association http://www.bvibar.org/ if your agents are active members and to verify their credibility.

As for your clients to be - certainly there are many people out of USA and EU in need of this service. Russia and ex-USSR countries, for example. Many are bringing money to Switzerland, just to receive nothing and to be locked out of normal trading and real investment opportunities.
More...

Thank you for the kind words. All the best to you, too!
 
archeolog108,

I do not know enough about your strategy, BIO, experience, risk management or your ability to sell your program to recommend SMA or a fund, but if you are based in the US, a US based operation makes sense to start.

Happy to talk one day. We talk to emerging managers often. It was why we were hired by Lightspeed to provide a variety of solutions for small and medium-sized Hedge Funds, Trading Groups and Active Traders.

If you are interested, my email and phone number are below.

Bob
 
archeolog108 said:
Hi,

Me and my business partner have 10 years of market experience. For 3 last years trading we are making 50-60% profits a year with minimal drawdowns on our small 400k USD account at IB. We also run our own companies not connected with finance.

We are in our at our 40s and we are thinking of scaling up our trading operation and sharing our profits with investors. Since we don't have connections in investment banks in USA and no millions of dollars required to run a hedge fund in USA or Europe, we are thinking of setting up incubator fund in BVI, which is cost effective. I know we will not be able to market to US investors and possibly not EU investors after MIFID II, but still a lot of investors left in the rest of the world.

We are planning to run this fund in minimalistic way (off sourcing operations, legal, accounting, no flashy offices, etc.) and see if after 2-3 years of heavy marketing/sales efforts, we will get any clients. I know getting clients is most difficult thing in this business so we would focus mainly on this, but incubator fund requirements need only 20k USD as minimum investment.

I would like to ask for advice or tips of anybody who is experienced in offshore fund space. What are the traps to watch for and what to focus on when starting such fund and getting clients?

I am pretty sure a lot of travel for live meetings around the world would be needed.
More...

BTW, in this post in August 2017 you had less than $10,000. Now $400K?
https://www.elitetrader.com/et/threads/prop-firm-without-day-trading.312728/#post-4509002
"I don't have measly 10000 USD. Only about 1000 USD."
 
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