Money Mangers Marketing

[bulat]

I just finished reading "Hedgehogged" and "Running Money", both written by hedge fund managers who talk about the travails of raising money for their funds.

The impression I got from these books, is that they received most of their client introductions through their prime brokers. The prime brokers took them to fund raising conferences and also made direct introductions to big investors.

Are there companies that provide this sort of service for a fixed fee, as opposed to future revenue sharing?

 

[2cents]

03-23-06 04:50 AM

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Quote from LongView:

Everyone wants managed accounts. At least every one who has contacted me.
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Quote from 2cents:

makes sense, much more transparency, security etc... its also much 'cheaper', cost & tax-efficient to run than any type of fund, even a cayman exempt or a bvi private structure... and you can still charge the client whatever fees you deem appropriate... and if the client accounts are opened with a prime broker outside the US, say the UK for instance, you can still apply mark-ups etc... and if your prime can do sub-allocations and let you trade the pool, you end up running something that works like a fund, except its even better for all parties involved, except of course for the lawyers, accountants, auditors and other questionable-value-adding people... no offense anybody...

but there may come a time / point when you don't have a choice / the admin's just too much / your prime broker's not playing ball because of this or that / or is too clearly attempting to back-engineer your strategies etc etc... that's where the fund comes in handy... just by way of update http://www.elitetrader.com/vb/showthread.php?s=&threadid=82397

 

[88888888]

Quote from ChrisM:

2cents,

thank you for the insights. What is your opinion about FCMs introducing CTA through its Introducing Brokers network ?

Any example to explain how that work?

 

[mokwit]

Quote from ChrisM:

Agreed. I`ve heard several time from institutional reviewers that high returns are not necessarily their major concern, but possible loses.
Some said that ideal product was - small gains, as close "Month-to-Month" as possible.

Seems they want something stable they can gear up against.

 

[ChrisM]

Quote from 88888888:

Any example to explain how that work?

I am not financial products marketing expert but I think this means distributing CTA program through IBs.

Brokerage business has additional challenge to deal with - clients losing money trading their own accounts. Using good CTA program can provide stability and steady commission flow for FCM.

 

[Aaron]

Quote from 88888888:

Any example to explain how that work?

Yes, Chris is right about the benefits to the broker. The IB recommends one or more CTA's. The investor picks a CTA and reads and signs the CTA's disclosure document. The investor gives the CTA limited power of attorney to trade his or her account. The broker gets commissions, the CTA gets management fees, and the investor (hopefully) gets trading profits.

As a CTA I frequently (well, once a week approx -- just got one from MF Global yesterday) get calls from IB's looking for CTA's to market. Since Schindler Trading only executes through Interactive Brokers we have to pass on the IB's who want us to trade their clients' accounts. We thus lose out on this source of business.

Interactive Brokers' low commissions, interest on cash balances, convenient advisor accounts, and capable API make me not want to deal with other brokers both for my sake and the sake of our investors. However, Interactive Brokers doesn't market or recommend CTAs, unfortunately.

Good trading,
Aaron Schindler
Schindler Trading

 

[mokwit]

Quote from formikatrading:

I wouldn't waste your time.

Please can you elaborate on this.

 

[Aaron]

Quote from mokwit:

Please can you elaborate on this.

Fyi, Mokwit, Formikatrading hasn't posted on ET for more than two years.

 

[mokwit]

Thanks for the headsup - wasn't looking at dates. Perhaps someone else can elaborate as to why Family Offices are not worth bothering with. I can understand third part multi family offices are too interested in making sure their backsides are covered, but what about Single Family offices (effectively Super HNWI?)

 

[88888888]

Quote from 2cents:

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...

Would you mind to explain why you feel that way? For examples? Thanks.