Hi,
I'm thinking about setting up a Fund of Funds (FoF) business..I have a few questions that are somewhat elementary so...:
-How eager are hedge fund managers when it comes to signing on board with a FoF manager?
-Where is the greatest opportunity for FoF managers today? Europe? Asia?
-Do I need to set up an offshore feeder fund component to attract foreign LPs?
-What do I charge? 1% on top of what my single manager funds are already charging? Do I get a piece of the performance fee? and how much is that?
-How fast can I kick out a low performing hedge fund out of my FoF?
-I know as a FoF I don't do any hands on money management per se, so am I just constantly reviewing and monitoring my manager's results? and evaluating new up and coming managers, and always hosting marketing events where I can get new clients for my managers?
About me:
I always wanted to get involved in the hedge fund business. I was proficient at stock picking and trading..but never flew out on my own. I knew a lot of guys who had their own funds..some did really well, others..well not so good. The risk is, then in a FoF is one or more of my 10 or so managers blows up and I go down with the ship..and clients may also see some managers own several of the same stocks/bonds in their portfolios..getting double or triple exposure. But the upside I see is diversification among managers/style/sectors..etc. Also clients/LPs may be more open to investing through a FoF rather than a single manager fund. As for risk, I can spread it out 10 managers deep.
I know many of you may be turned off by it and rather manage the $ yourself..but this is just a thought right now..and I'm just keeping an open mind toward opportunities in the hedge fund arena before I graduate.
I used to work as a retail broker for several years, (Bear, Morgan, etc)..wanted to be more entrepreneurial and run my own shop/business so I went back to business school (UCB Haas) and will be finished in a yr and a half.
I'm thinking about setting up a Fund of Funds (FoF) business..I have a few questions that are somewhat elementary so...:
-How eager are hedge fund managers when it comes to signing on board with a FoF manager?
-Where is the greatest opportunity for FoF managers today? Europe? Asia?
-Do I need to set up an offshore feeder fund component to attract foreign LPs?
-What do I charge? 1% on top of what my single manager funds are already charging? Do I get a piece of the performance fee? and how much is that?
-How fast can I kick out a low performing hedge fund out of my FoF?
-I know as a FoF I don't do any hands on money management per se, so am I just constantly reviewing and monitoring my manager's results? and evaluating new up and coming managers, and always hosting marketing events where I can get new clients for my managers?
About me:
I always wanted to get involved in the hedge fund business. I was proficient at stock picking and trading..but never flew out on my own. I knew a lot of guys who had their own funds..some did really well, others..well not so good. The risk is, then in a FoF is one or more of my 10 or so managers blows up and I go down with the ship..and clients may also see some managers own several of the same stocks/bonds in their portfolios..getting double or triple exposure. But the upside I see is diversification among managers/style/sectors..etc. Also clients/LPs may be more open to investing through a FoF rather than a single manager fund. As for risk, I can spread it out 10 managers deep.
I know many of you may be turned off by it and rather manage the $ yourself..but this is just a thought right now..and I'm just keeping an open mind toward opportunities in the hedge fund arena before I graduate.
I used to work as a retail broker for several years, (Bear, Morgan, etc)..wanted to be more entrepreneurial and run my own shop/business so I went back to business school (UCB Haas) and will be finished in a yr and a half.
