"OMG."
I had to see it to believe it.
(And now I've seen it.)
Wow. I can't even muster a reply to the guy.
Color me.....
Ignorance must be bliss.
How to start a Hedge fund?
- Thread starter joey juneau
- Start date
Ignorance must be bliss.
Well, what is your view of the hedge fund landscape? Cause a lot of the negative things said in this thread are true - hard to raise capital beyond FnF, hard to beat benchmarks given the competitiveness of the business, with the new requirements it's hard to cover overhead. From my seat, it's a hard business to be in and even harder business to get into.
No doubt things are changing and its harder now to raise capital. Pre madoff $20 m plus deals were done on a handshake.
Regardless, there remains growth in smaller capacity constrained HF 's with niche strategies.
I agree with you, the glory days of the huge long/short funds are ending.
The OP is a newbie and common investor not with any wall street contacts.
$20m deals on a handshake happens only in the elite circles of the Goldman, JPM and other houses.
Even "average joe" wall street insiders run around like sidewalk peddlers to get funding. For majority of HF start ups, two main reasons of failure is inability to raise enough capital to break even year after year and of course performance sub par to averages.
HF is not a vanishing industry but a new regulations from bold leader like Trump can overhaul the variables quickly. Instead of 2-20 fees structure he mandates 2-10 numbers or worst creates a hurdle rate before incentives kick in and HF start ups will dry up fast.
1- False. They were common pre-madoff.
2- ok
3-- most funds already have high water mark and other incentive hurdles. 2x20 is a thing of the past already. Most new funds are 1x10 or even 0x10 0x5. Only the established old guard can charge 2x20 or more. This has nothing to do with trump or regulations. Its a function of competition.
Sorry pal no agreement there on fee structure, never heard of 0x10 or worst 0x5 until and unless some structured scaling is in place i.e. big sum broken into pieces with later portions charging less fees and incentives.
Do not know what you stand to gain from "disinformation" that would mislead a newbie and vulnerable "wanna be".
Some one mentioned Friends and Family and that is better way to go about rather than investing savings $100K into starting a HF going through all sorts of regulations etc.
0x5....
???There's no way that that's possible... For most hedgefunds that wouldn't even cover their overhead and fees....
0x5....
There's no way that that's possible... For most hedgefunds that wouldn't even cover their overhead and fees....
I really hate to write this, but I'm going to disagree.
Without going into sordid details, the actual *operation* of a fund is available to anyone with a desktop. "Operations" can be done by one person; "Trading" can be done by 2-3-4 others; "Research" can also be done by 2-3-4 more. And all of a sudden, a guy with an undeveloped basement has thrown paint and cubicles around, installed redundant signal and battery back-ups......
I'm in Indianapolis. We've got two pro sports teams here, and 2-3 sizable company hqs, and draw a surprising amount of national and international money. It is *not* a finance hotspot, and expectations surround: 1) you're a known entity (to put the laugh to MktWetness and his disinformation campaign
), 2) you're damn cheap. (Or, off they go, to Chicago, for some pizza and hedges.)That's jus' my take. But it's a take from a land of ferociously low overhead, lots of latent talent, and a neighbor nearby (Okay -- a 3hr drive) who'd love to take your money. So, 0x5 would work, in the conjunction with other activities, here.
Dang. I used an "emogee"......
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Do you have:
a) talent
b) experience
c) knowledge
d) credibility
e) edge/alpha
HF is as much as a investing game an social game where you have to meet clients face-to-face to sell yourself and your capatibilities. It's more about trust and strategy than the historical performance.
If you really want to do this you can start your journey by register as a CTA, start your LLC, invest your own money and persuade family, relatives, friends and coworkers to invest money in your fund. Your first goal would be to get your fund above $1 million dollars in assets, next major goal is $10 million. Work hard and build AUM step by step.
a) talent
b) experience
c) knowledge
d) credibility
e) edge/alpha
HF is as much as a investing game an social game where you have to meet clients face-to-face to sell yourself and your capatibilities. It's more about trust and strategy than the historical performance.
If you really want to do this you can start your journey by register as a CTA, start your LLC, invest your own money and persuade family, relatives, friends and coworkers to invest money in your fund. Your first goal would be to get your fund above $1 million dollars in assets, next major goal is $10 million. Work hard and build AUM step by step.