Hedge Fund Manager? A question

Quote from JTG:

Normally HFs charge 2% management fee and a 20% incentive fee (on profits). However, there are times the incentive fee only kicks in if the fund hits a high water mark.
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I know of a southwest ct HF charging 1% and 10%.

Often times HF's will forgo all fees if they barely break even that year (from what I've heard)...
 
Quote from GordonTheGekko:

I know of a southwest ct HF charging 1% and 10%.

Often times HF's will forgo all fees if they barely break even that year (from what I've heard)...
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I find it fascinating that there exists trading groups whose business model has devolved into liquidity rebates as the primary source of income. Not really trading, and a simple exchange legislative / policy change can destroy their world.
 
Quote from FrankSlaughtery:

+1. esp for institutions. if you got 1 and 10 now i'd be impressed. some aren't even paying perf fees! what's the world coming to. oh i'll tell you. investors don't want to pay alpha fees for beta perf which is what everyone has been saying for years but only recently started acted on en mass.
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This is true as a generalization, but not on an individual basis. This business is just like all others out there. You charge what you can in order to maximize profits over the long term. If a fund is performing like a mutual fund, which happens to be about 90% of them, then clients are going to demand mutual fund level fees.

But there are still some of us with high alpha and very low beta, and I haven't had anyone question my fees yet, which are currently 0/30. But my returns aren't typical either.
 
Quote from falcon:

So what would you charge me for investing and how much can I expect to make?
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Any legitimate Fund Manager or CTA will not be able to provide numbers on performance expectations on a public forum. You must be vetted as a potential client and given a proper disclosure document.
 
Quote from Epic:

This is true as a generalization, but not on an individual basis. This business is just like all others out there. You charge what you can in order to maximize profits over the long term. If a fund is performing like a mutual fund, which happens to be about 90% of them, then clients are going to demand mutual fund level fees.

But there are still some of us with high alpha and very low beta, and I haven't had anyone question my fees yet, which are currently 0/30. But my returns aren't typical either.
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i completely agree. i was only talking about the mutual fund clones. you're model (zero management fees) is preferable.
 
I have turned down $2 billion to manage this year, and have returned 100% of client's funds and their profits. I do that every December. I still date some of my clients' daughters. Well, to be honest, they really they date me.
 
FYI- in a nutshell, hedge funds far outperform any mutual fund arrangement, ad the reason why they're not accessible to anyone not a millionaire is because of Washington's goal of the elite maintaining power (their stated reason during the great depression was that 'rich people can fend for themselves.')
 
Also, to answer the guys question, as a rule of thumb most hf's of varying sizes from $300m to $50b make 20%-60+% per year. Of course nothing is guaranteed in this business, so when there is a drop down, things get dramatic between people! Hedge finds wont disclose their record without an NDA- which is bad because they cant advertise, but good if they're performing terribly and don't want to face the music just yet. (I want you to suspend disbelief and read cramer's first book confessions of a street addict - it was written for professionals and competent traders, and is actually a decent read about wall street and the 90s)
 
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