Growing AUM with "first loss" funds

Quote from heech:

I don't see why it has to be "solely" managed account.
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As far as I know you cannot notionally fund a Fund. Notionally funding cannot work within a Fund structure...again as far as I know.

If you have contrary information, please do share.

What you possibly can do is in your reporting, indicate the Fund's returns have been adjusted by the notionally funding factor and that true fund assets are X. Even if you do not dislcose true Fund asets, anyone can easly stimate that once you dislose the notionall funding leverage factor - which I think you will be bound to disclose if you were to do this.

Example:

True Fund Assets: $1M

Notional Funding Factor: 10% i.e. 10:1

Monthly profits: $100,000 i.e. 10%; i.e. 1% on a de-levered basis

Your monthly report will have to show the 1% return and indicate it was calculated by deleveraging by 10. By doing this one can automaticlaly estimate that your Fund assets are not 10M but 1M. This might help you get through some initial screens, like when funds screen on databases for funds with certain minimum AUM...but after this initial screen, it'll become obvious.


Again, I may be wrong and if you have contrary info, please do share.
 
There isn't a league office that keeps track of "records" and deciding whether an asterisk that goes on it. You put whatever data out there, and understand that future (sophisticated) investors will be judging you on the weight of evidence.

So, any marketing material for the institutional fund would reflect $10 million in "strategy assets" + whatever performance numbers.
 
Quote from heech:

There isn't a league office that keeps track of "records" and deciding whether an asterisk that goes on it. You put whatever data out there, and understand that future (sophisticated) investors will be judging you on the weight of evidence.

So, any marketing material for the institutional fund would reflect $10 million in "strategy assets" + whatever performance numbers.
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Pretty much there is a league office that keeps records. Of course, the numbers are whatever funds publish themselves.

http://www.hedgefundintelligence.com/
 
Quote from CPTrader:
I trust you know though that your returns will be calculated on the Notional amount...
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So a managed account structure works differently to trading prop? I understand that at a prop if I put down $100k leveraged 10x to $1M, and I'm down to $950k - for the sake of building up a track-record, that's calculated as a 50% drawdown - not a 5% drawdown.

Whereas using a managed account structure, it would be a 5% drawdown?
 
So I just joined this forum becuase someone shot me this thread....with a high level of confidence I think I am the B in the B&T, pig latin equation.

Firstly - feel free to contact me direct with any questions, welcome answering any questions you might have.

Bryan Borgia
bborgia@topwaterllc.com
203-604-1117

This is a very interesting thread, it is interesting hearing what people think about, all very valid questions and concerns. For any of you whom have had a call with me, I am a broken record, and I always say that this "is certainly not a fit for everyone." These can be very good accounts for the right types of traders/managers in the right time of their careers - and the exact opposite for other managers/traders.

Reputation - I hope that we have a good one, welcome any manager/trader to come to our offices - kick the tires, and ask around. I would do the same thing.

There are other firms, some a direct copy cat, and some with different bends - I doubt many of them have the team, 9 years experience, connections, and capital that we have here at Topwater.

Lastly - it is important to note that I have only one goal here, and that is to find managers/traders who take money out of the market - and then get as much capital to those managers as possible - so if you have a trading program, strategy, etc. that does this I would like to talk to you, please contact me.

Cheers - B
 
Ha, yes you are. I didn't think I'd get this quality of response from the thread... a lot of very thoughtful answers. I'm also glad Maverick74 knew enough of your firm to give his personal endorsement. And I think you add to your reputation by showing up here as well, broken record and all.

In fact, I've already turned on a few people to your fund, "B", as a realistic option they should consider. I fully concur with you that it's a fit for managers at a specific point in the growth cycle.
 
Great info here.

Heech, you say u report to the major DB's...do you have a link or name of your fund. Would like to look it up.
 
Yeah I won't reveal your real name...it was good talking to you. There are some real good points on this thread. I do concur that if the manager/trader is looking for less than 10MM then our structure makes little sense - for them and us - I am more looking for managers that I can leg 25,50,100MM to over the course of 12-18 months. As such I have not done business with too many "prop" guys becuase they typically do not need much capital. That said - I really like prop guys becuase they usually are "eat what they kill" type guys...and when they find strategies they need more capital for I am usually a willing provider.

Anyhow - appreciate the referals....and nice to know this website exists, as I didn't know it till this AM.

B
 
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