Negotiating a trading arrangement with a hedge fund

B

bidask

I was wondering if anyone has experience negotiating a trading arrangement with a hedge fund or trading desk. what is the typical arrangement? is it normally base + % of pnl or just % of pnl only?

What are the numbers? Details please!:)
 
No. The fund charges 2 and 20, the individual trader doesn't get that. It will typically be a salary plus % of portfolio profit as well as a discretionary bonus. Nowadays with the way traders jump around, they usually get some sort of guaranteed amount written in (but often it will be in a signing bonus). It ranges depending on the size of the fund, size of your portfolio etc.
 
With the fund group we do the due diligence for it's 50/50; i.e., the trader starts off with 50% of the profit incentive fees charged. We do have the advantage of charging higher fees for certain traders/programs because of our relationship with this particular group (between 25% and 35%), but most funds usually don't want to charge more than 25% (at least from my experience).
 
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