Experienced trader/Fund manager looking for a prop firm

R

Rachmaninov

Dear ET reader,

Next week I ll be at Chicago for the CTA expo to find some money for my fund.
I currently have 'classic' investors with the 2/20 deal. I wonder if prop firms could be interested, here the situation:

I am small with 4.5 m $ AUM and new, first managed account opened in march.
But I have a nice track record, 10%/year (net of fées), 7.5 % volatility, 6 % DD on 6 years on my prop account (real money, certified by accountant). Its 9000 round turn/million (à lot) and average MTE at 20%. Can be leveraged 2 to 2.5x as its a managed account structure. Its only commodities with average holding around 2 weeks.

Which prop firm could be interested ?
What are the best prop for me ? (better if they have a CBOT/CME Seat)
How Can I présent myself to them ?

I would be ok with their 0/40-50-60 deals.

Please no troll, just nice advice.

Best
 
Rachmaninov said:
Dear ET reader,

Next week I ll be at Chicago for the CTA expo to find some money for my fund.
I currently have 'classic' investors with the 2/20 deal. I wonder if prop firms could be interested, here the situation:

I am small with 4.5 m $ AUM and new, first managed account opened in march.
But I have a nice track record, 10%/year (net of fées), 7.5 % volatility, 6 % DD on 6 years on my prop account (real money, certified by accountant). Its 9000 round turn/million (à lot) and average MTE at 20%. Can be leveraged 2 to 2.5x as its a managed account structure. Its only commodities with average holding around 2 weeks.

Which prop firm could be interested ?
What are the best prop for me ? (better if they have a CBOT/CME Seat)
How Can I présent myself to them ?

I would be ok with their 0/40-50-60 deals.

Please no troll, just nice advice.

Best
More...
 
Dear ET,
This reply might not be what you are looking for. I have similar interests as you have, tired of all trade platforms and smart traders with small print forms, and then following problems of all kind. I like to start up my own platform, and sign on traders. Agreements to be made for mutual benefit. I am not within this trade. I am an inventor, patent holder and entrepreneur, with an MS.c. BS.c. and LLM exam. I need funding for my projects. Funding offers so far has all been of an unacceptable character. Projects are on scale for the benefit of mankind. All new technology. Costly to start.
Therefor I am out on unknown waters here, and would need everything from scratch for a "platform" to operate. Open for any suggestions (any lawful such). Hope for your understanding and time. Looking forward to your, or any sincere reply on this within this community.
 
Rachmaninov said:
I would be ok with their 0/40-50-60 deals.
More...

If you are currently offering 2/20 as a CTA, why would anyone subscribe with 0/40to 0/60? In many cases 2/20 can look very similar to 0/30 over time. And, if you become an employee of a traditional prop firm, they will likely not want you to run your CTA business.

I'd suggest putting together your tear sheet/presentation and sell your services to them and other investors in the same way. In fact, many early stage CTAs offer better than 2/20 to get AUM up for larger allocations. I'd suggest offering 1/20 for $1mm or more and 1/15 for $5mm and up.

Bob
 
Birger Jarl said:
Dear ET,
This reply might not be what you are looking for. I have similar interests as you have, tired of all trade platforms and smart traders with small print forms, and then following problems of all kind. I like to start up my own platform, and sign on traders. Agreements to be made for mutual benefit. I am not within this trade. I am an inventor, patent holder and entrepreneur, with an MS.c. BS.c. and LLM exam. I need funding for my projects. Funding offers so far has all been of an unacceptable character. Projects are on scale for the benefit of mankind. All new technology. Costly to start.
Therefor I am out on unknown waters here, and would need everything from scratch for a "platform" to operate. Open for any suggestions (any lawful such). Hope for your understanding and time. Looking forward to your, or any sincere reply on this within this community.
More...
Thanks for your reply, however I am looking for money not platform. I have already all my system set up.
 
Robert Morse said:
If you are currently offering 2/20 as a CTA, why would anyone subscribe with 0/40to 0/60? In many cases 2/20 can look very similar to 0/30 over time. And, if you become an employee of a traditional prop firm, they will likely not want you to run your CTA business.

I'd suggest putting together your tear sheet/presentation and sell your services to them and other investors in the same way. In fact, many early stage CTAs offer better than 2/20 to get AUM up for larger allocations. I'd suggest offering 1/20 for $1mm or more and 1/15 for $5mm and up.

Bob
More...

Given my low vol, 2/20 compare to 0/40. However I prefer some fix fees that I can invest in R&D. But good point. I have limited capacity and correlation to other classic investment so I am not anymore on my early stage and hopefully I ll get 2/20 as I dont see many programs with Sharp Ratio above 1 and uncorrelated (and not selling options).

Thanks
 
Rachmaninov said:
Given my low vol, 2/20 compare to 0/40. However I prefer some fix fees that I can invest in R&D. But good point. I have limited capacity and correlation to other classic investment so I am not anymore on my early stage and hopefully I ll get 2/20 as I dont see many programs with Sharp Ratio above 1 and uncorrelated (and not selling options).

Thanks
More...
Please send me you CTA information. Maybe I can help. I have raised over $1.5mm in the last 6 months for a CTA that does sell options. I need managers with good returns, that use little margin, that are uncorrelated to the ES put sellers. I'd love a CTA that is a conservative day trader with consistent returns, but can find one. I have tried out 3 with my own money, but they all did poorly. I know that is not what you do, but I'm interested to learn more.
 
Rachmaninov said:
Dear ET reader,

Next week I ll be at Chicago for the CTA expo to find some money for my fund.
I currently have 'classic' investors with the 2/20 deal. I wonder if prop firms could be interested, here the situation:

I am small with 4.5 m $ AUM and new, first managed account opened in march.
But I have a nice track record, 10%/year (net of fées), 7.5 % volatility, 6 % DD on 6 years on my prop account (real money, certified by accountant). Its 9000 round turn/million (à lot) and average MTE at 20%. Can be leveraged 2 to 2.5x as its a managed account structure. Its only commodities with average holding around 2 weeks.

Which prop firm could be interested ?
What are the best prop for me ? (better if they have a CBOT/CME Seat)
How Can I présent myself to them ?

I would be ok with their 0/40-50-60 deals.

Please no troll, just nice advice.

Best
More...

Like any industry there is a defined structure which is, for all intents, impossible to bypass unless you are have what the markets deem as inconsequential AUM. To grow further you have to start integrating in to the "system", that means placement agents, they want your life history, no mistakes, that you will not damage their client "goodwill", and most importantly guarantee they will be paid. That process is incredibly slow.

Obviously you can continue to grow via word of mouth, conferences, and marketing, however again it is an incredibly slow process until you hit critical mass. The 2/20 becomes arbitrary, if you produce the returns investors will pay the fees based on return vs risk, the higher the return and the less risk involved the more you can charge. Our funds, the structure is a more complex than that, have a graduated 4/40 with limited investors spread across multiple risk profiles.

Everyone is looking for funds, a prop firm is not the way to go, but you are too small for most firms to take any notice. The best approach is to slowly and individually contact different placement agents, absorb their comments, be polite, thank them for their advice, and the next month try another. As they come across people investing capital some may not meet the criteria and be pushed your way, it only takes one to start the process.

The financial markets and its investors will not accept being rushed, as you are not Goldman, you have to use time to your advantage which ultimately builds trust, 0/40 is not trust building, investors respond to confidence. You can look at the Angel networks, AKJ may have some ideas for you, and make sure you have a top tier prospectus designed.
 
You must log in or register to reply here.
Back
Top