Well, all the deals I have seen with this arrangement required you to put your capital in their broker dealer. I guess we can let Darkhorse confirm that is the case. The whole sales pitch on their end to the "so-called investor" is, we made an investment in this guy with our capital. We control the risk since the fund is in our broker dealer. I think the CTA model works much better. It's also a cleaner industry. It's highly regulated. Your track record follows you wherever you go unlike the hedge fund world where you can blow up a fund and come back under a new name. In the CTA world, you have to disclose a 5 year history of all your funds. So if you closed down two funds and started a 3rd, you still have the disclose the performance of the two previous funds you shut down.
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Looking for Pro firm
- Thread starter Chuck Krug
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Well, all the deals I have seen with this arrangement required you to put your capital in their broker dealer. I guess we can let Darkhorse confirm that is the case. The whole sales pitch on their end to the "so-called investor" is, we made an investment in this guy with our capital. We control the risk since the fund is in our broker dealer. I think the CTA model works much better. It's also a cleaner industry. It's highly regulated. Your track record follows you wherever you go unlike the hedge fund world where you can blow up a fund and come back under a new name. In the CTA world, you have to disclose a 5 year history of all your funds. So if you closed down two funds and started a 3rd, you still have the disclose the performance of the two previous funds you shut down.
Quote from Maverick74:
Well, all the deals I have seen with this arrangement required you to put your capital in their broker dealer. I guess we can let Darkhorse confirm that is the case. The whole sales pitch on their end to the "so-called investor" is, we made an investment in this guy with our capital. We control the risk since the fund is in our broker dealer. I think the CTA model works much better. It's also a cleaner industry. It's highly regulated. Your track record follows you wherever you go unlike the hedge fund world where you can blow up a fund and come back under a new name. In the CTA world, you have to disclose a 5 year history of all your funds. So if you closed down two funds and started a 3rd, you still have the disclose the performance of the two previous funds you shut down.
Yep I'm with you on this, this is what I do as well.
Quote from operator:
Good idea. Because sometimes people on ET just tend to make things up and state them as facts...
Here is a fact for you. Ninety nine percent of the firms that do these deals require you to put your money with their broker dealer and into their fund that is setup. That's the whole freaking point!
Quote from Maverick74:
Well, all the deals I have seen with this arrangement required you to put your capital in their broker dealer. I guess we can let Darkhorse confirm that is the case. The whole sales pitch on their end to the "so-called investor" is, we made an investment in this guy with our capital. We control the risk since the fund is in our broker dealer. I think the CTA model works much better. It's also a cleaner industry. It's highly regulated. Your track record follows you wherever you go unlike the hedge fund world where you can blow up a fund and come back under a new name. In the CTA world, you have to disclose a 5 year history of all your funds. So if you closed down two funds and started a 3rd, you still have the disclose the performance of the two previous funds you shut down.
Sigh...
They use Merrill Lynch Prime Brokerage. Merrill is a somewhat reputable and large firm, been around a while, maybe you've heard of them?
The "so-called investor," nice.
Look, all aspects of money management transactions require some form of trust based on the credentials and verification of the other party.
I mean, for all your future investors know, YOU could be the Bernie Madoff in the equation. When you want a high net worth investor to give you a million dollars, how does HE know you're not going to pull a vanishing act with it? There are ways to mitigate that fear, yes, by choosing a sound and logical custodian, checks and balances, regular reporting, etcetera. Well guess what, it works the same way when you're clearing through fuckin' Merrill Lynch, as opposed to Joe's Crab Shack and PB Services.
The real answer as to how to get HNWIs to give credibility points to an unknown trader is through verification and vouchsafing from trusted parties who have placed significant amounts of capital and have a rep in the business. This allocator has been around for a decade. They run through Merrill Lynch Prime Brokerage. They regularly do deals with not just unknown emerging hedge fund managers, but high-wattage portfolio managers coming out of multi-billion-dollar funds (for ex. Third Point) to start up their own shops.
In other words, in terms of the trust verification aspect, the question is who is the unknown party who needs the cred? Credibility is another significant positive aspect of the deal. If you build a track record through this allocation process, THEY are the ones putting THEIR stamp of credibility on YOU in terms of attracting future HNWIs willing to believe in YOU.
As for going CTA, sure, fine... if you trade futures instead of equities!!! That's a different kettle of fish. As is all the stuff about why being a CTA is better than being a hedge fund manager yadda yadda. (And by the way, re, futures risk, two words: Peregrine Financial.) If you trade futures you primarily trade futures. If you trade equities you primarily trade equities. By the time someone has a track record worth allocating to, it's doubtful they would think something like "Hmm, my expertise is in equities but I think the futures biz is "cleaner" so I'm going to switch to futures instead."
Quote from cdcaveman:
ew ohhh yeah.. he said .. F8ckin.. High wattage.. i like range of vocab..
<iframe width="560" height="315" src="http://www.youtube.com/embed/ZwqMoqhf8Hw" frameborder="0" allowfullscreen></iframe>
Of all the dumb things to call out a trader for, using fuck as combination adverb, adjective, preposition, etc. should be at the absolute bottom of the list.
p.s. Last I checked, you don't have to censor yourself here. Or at least, I haven't gotten in trouble yet.
Quote from darkhorse:
Sigh...
They use Merrill Lynch Prime Brokerage. Merrill is a somewhat reputable and large firm, been around a while, maybe you've heard of them?
The "so-called investor," nice.
Look, all aspects of money management transactions require some form of trust based on the credentials and verification of the other party.
I mean, for all your future investors know, YOU could be the Bernie Madoff in the equation. When you want a high net worth investor to give you a million dollars, how does HE know you're not going to pull a vanishing act with it? There are ways to mitigate that fear, yes, by choosing a sound and logical custodian, checks and balances, regular reporting, etcetera. Well guess what, it works the same way when you're clearing through fuckin' Merrill Lynch, as opposed to Joe's Crab Shack and PB Services.
The real answer as to how to get HNWIs to give credibility points to an unknown trader is through verification and vouchsafing from trusted parties who have placed significant amounts of capital and have a rep in the business. This allocator has been around for a decade. They run through Merrill Lynch Prime Brokerage. They regularly do deals with not just unknown emerging hedge fund managers, but high-wattage portfolio managers coming out of multi-billion-dollar funds (for ex. Third Point) to start up their own shops.
In other words, in terms of the trust verification aspect, the question is who is the unknown party who needs the cred? Credibility is another significant positive aspect of the deal. If you build a track record through this allocation process, THEY are the ones putting THEIR stamp of credibility on YOU in terms of attracting future HNWIs willing to believe in YOU.
As for going CTA, sure, fine... if you trade futures instead of equities!!! That's a different kettle of fish. As is all the stuff about why being a CTA is better than being a hedge fund manager yadda yadda. (And by the way, re, futures risk, two words: Peregrine Financial.) If you trade futures you primarily trade futures. If you trade equities you primarily trade equities. By the time someone has a track record worth allocating to, it's doubtful they would think something like "Hmm, my expertise is in equities but I think the futures biz is "cleaner" so I'm going to switch to futures instead."
OK, I'm not going to continue to berate you over this stuff. I just want to speak about these deals in a more general sense. I know a few of the big firms that are in this business and have been for over a decade. So that is where my experience lies.
So can I ask you what your website has to do with this. I checked it out and not really sure what the connection is. It seems like a cool blog, at least well designed but is that the actual company that is the IB to these allocator deals? And if so, can I ask why your "real" contact info is not listed there? I mean how do people check you guys out? I'm not even sure why you would hide your contact info anyway. While catchy, I'm not sure using Jack Sparrow and Mike McDermott is going to bring confidence to people.
"Rounders" is one of my favorite movies though.