Money Mangers Marketing

CAGR of 30% , Max DD of 10%. I have no idea what the returns of DE Shaw have been like or those of Jim Simons and his Medallion Fund - reputed to be a couple of the best hedge funds around.

I do happen to have small investments in Bruce Kovner's Caxton Fund and a couple of Louis Bacon's Moore Capital funds and I can tell you the ratios are nothing like that good. Nothing like it.

Over the long term (10 to 15 years) I would be very, very surprised if there are many (or even any) hedge funds or CTAs with such a record.
 
2cents,

thank you for the insights. What is your opinion about FCMs introducing CTA through its Introducing Brokers network ?
 
no real insights here, just my views based on some hopefully relevant enough experience but i assume thats what you meant...

long story short, i have no time anymore for IBs, financial planning etc type outfits, know them inside out, as an investor, consultant, banker, broker and now manager... not to say you can't find a good one but thats a bit of a goose chase honestly... total waste of effort...

fwiw, the way i operate now is via a trusted person chain, and i don't normally take introductions from someone who doesn't already have money at play with me... i also don't take money from people i don't 'like', particularly in terms of how they seem to relate to money in general, or in particular... very subjective notion i know, but thats how i work... now, it does make for a slower (AUM) growth path but i have plenty of time, and as long as i remain performance-positive, i am a v.happy bunny already ;-)
 
Quote from ananda:

CAGR of 30% , Max DD of 10%. I have no idea what the returns of DE Shaw have been like or those of Jim Simons and his Medallion Fund - reputed to be a couple of the best hedge funds around.

I do happen to have small investments in Bruce Kovner's Caxton Fund and a couple of Louis Bacon's Moore Capital funds and I can tell you the ratios are nothing like that good. Nothing like it.

Over the long term (10 to 15 years) I would be very, very surprised if there are many (or even any) hedge funds or CTAs with such a record.
More...
well lets not compare apples to oranges... my point is that as a 'young' manager you need to really impress your prospective HNW people to compensate for your short track record and small AUM size... come to think of it, here is an interesting resource fyi, despite the lack of detail http://informais.com/topguns/topguns.asp? worth registering for a look i'd say... other than that, eurakahedge and all the others of course...
 
Thought I would give an update for those who care as far as my marketing search goes.

I found a firm that has a database of over 10,000 resumes for sales people in the financial industry. The guy I spoke with gave me a proposal that is pretty good. Basically they find a candidate with an existing roladex of the type of that clients I want to target and they approach him/her and interview them a couple of times then I can interview them if I am interested. If it seems like a good fit and the person is willing they then come to work for you.

I told him I can't offer any kind of base salary and he said he has hired over 30 candidates for commission only positions for funds that don't even have any capital yet.

So I am exploring this option. Not sure if I am going to go with it yet. The fee is very reasonable for the service they provide. One thought I had was to share the cost with this other CTA that I know and have the guy market both of us.

It's all up in the air right now, but is seems like a viable option. He only wants 25% of the fee upfront, he will work with you until you find someone and if the person doesn't work out in the first 90 days he will go find another free of charge.

On the capital front I have be fortunate enough to receive another $1m this month from current investors so that has been a blessing. I am right at $4m which is getting close to the $5m milestone at least people tell me it's a milestone.

Anyhow any thoughts on this marketing idea? Good or Bad?
 
there's always a chance of course but if these guys were really good this is probably not how they would want to be approached by managers i'd think... but why not...

actually just re-read the thread from the start, excellent contribs from cptrader and quite a few others, rufus in particular (and shall i say 'as always'), think you've got pretty much all yr answers there. reading rufus's posts again made me think: don't neglect the headhunters, just an isolated case perhaps but my 2 top investors are head-hunters, and as long as they believe that your strategy is scalable, are natural and willing door-openers to their general partners, some of whom are actually seriously seriously wealthy... not mentioning their network...

other thought, you seemed to have a rather smooth equity curve, have you tried the seed capital etc teams at calyon, paloma partners and the like - got a bunch of contacts gleaned at a terrapinn hedge funds seminar if your interested - i think they are totally unhelpful actually but if you want to have a go...

congrats on getting this additional $1 btw ;-)
 
Sorry. Another question.

Can managers customize their own compensation package?

For ex. Instead of taking the traditional 20% profit. Could they take 100% of everything over say, 50% profit? Assuming they had an audited record with low dd?
 
good luck with that... you'd probably have to 'guarantee' some min. positive return for a client to swallow that, and that would be a pretty bad idea imo...

however, nothing wrong about monthly high-watermark 25% profit-share for instance, and you can compound the monthly profit-shares (hopefully) on your PA... plus mark-ups of 1/2 to 1 pip a side don't hurt.. pays for the bloomberg, sandwiches, and a few other things... just a few ideas...

have a good wek-end!
 
BE CAREFUL hiring a person to strictly raise assets. It is my understanding the person's job title, responsibilities and compensation must be based on something other than assets raised. In order to have a sole responsibility to raise assets a person must be a licensed Broker/Dealer.

This is relevant for the Hedge fund space, I am not sure how it applies to CTA's.

As always in the highly litigious environment we live in, I feel it is imperative that everyone at least talk to a lawyer on the marketing front. Here is a site www.hedgefundworld.com there are some interesting overview type articles on the site.

One last thought, it is really nice to see an intelligent thread about managing OPM not get hijacked by some of the prop guys spewing negative thoughts. I have found this thread highly informative and very well-informed.
 
archilles28 - I considered doing a high-water mark but found few funds/CTAs advertising that. If your stats are that good I would suggest holding onto that and using it if you have a potential client on the fence...instead of giving it away.
 
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