Raising capital to start a hedge fund

SuperVolatility · Nov 1, 2007

I was reading a book by Jack Swagner and was wonder how do people who don't have friends or family with lots of money start a hedge fund?

How do you find clients or get funds to invest in your fund? Obvioiusly you could trade your own account but it'll take much longer.

Runningbear · Nov 1, 2007

I read an article by one of Australia's most successful hedge fund managers recently and he said the hardest thing about his job was finding people who were experts in a particular area of investment and who had a proven consistant track record. He made the point that his fund couldn't expand without these people which was the problem he now faced.

So I don't think it matters if you don't know anyone. If you can prove that you are consistantly successful, someone will take a chance of you.

I suspect however that many people who like the idea of being a hedge fund manager don't in fact have a consistantly successful record.

Runningbear

thetrendfollowe · Nov 1, 2007

Quote from Runningbear:

I read an article by one of Australia's most successful hedge fund managers recently and he said the hardest thing about his job was finding people who were experts in a particular area of investment and who had a proven consistant track record. He made the point that his fund couldn't expand without these people which was the problem he now faced.

So I don't think it matters if you don't know anyone. If you can prove that you are consistantly successful, someone will take a chance of you.

I suspect however that many people who like the idea of being a hedge fund manager don't in fact have a consistantly successful record.

Runningbear

Agree, and the exact reason why i blog my trading.
So I have a track record that can be easily verified.

Businessman · Nov 1, 2007

Quote from thetrendfollowe:

Agree, and the exact reason why i blog my trading.
So I have a track record that can be easily verified.

Blog

You need audited accounts to be taken seriously.

Cutten · Nov 1, 2007

You need to network, and build up a track record with your own money that can be audited. Consider applying for jobs at funds/hedge funds too. That is a time honoured way to get experience. Many fund managers did time first at other firms before striking out alone.

thetrendfollowe · Nov 1, 2007

Quote from Businessman:

Blog

You need audited accounts to be taken seriously.

OK.
Thanks for your response.

I guess that is my next step then.

How much does this cost?
Roughly.

u21c3f6 · Nov 1, 2007

Quote from thetrendfollowe:

OK.
Thanks for your response.

I guess that is my next step then.

How much does this cost?
Roughly.

No offense and with all due respect, if you have to ask this question, it would be hard for me to believe that you would have a record that would be worthy of serious consideration.

Joe.

Sobieski · Nov 1, 2007

Quote from u21c3f6:

No offense and with all due respect, if you have to ask this question, it would be hard for me to believe that you would have a record that would be worthy of serious consideration.

Joe.

Translation: Joe has no idea himself.

u21c3f6 · Nov 1, 2007

Quote from Sobieski:

Translation: Joe has no idea himself.

The concept is, if you have a record that is worthy, then you should have already proven that you can make serious money greater than the averages at which point you don't necessarily need to start a hedge fund.

However, if the above is true and you want to step up to making very serious money via a hedge fund, then the cost of an audit should not be a deterrent unless you not confident about your record.

This post is not meant to take a stab. I have seen too many posts where someone wants to start a hedge fund with a record of a 2 month paper profit and various other unacceptable records worthy of consideration. Just trying to put it in perspective.

Joe.

Sobieski · Nov 1, 2007

Quote from u21c3f6:

The concept is, if you have a record that is worthy, then you should have already proven that you can make serious money greater than the averages at which point you don't necessarily need to start a hedge fund.

However, if the above is true and you want to step up to making very serious money via a hedge fund, then the cost of an audit should not be a deterrent unless you not confident about your record.

This post is not meant to take a stab. I have seen too many posts where someone wants to start a hedge fund with a record of a 2 month paper profit and various other unacceptable records worthy of consideration. Just trying to put it in perspective.

Joe.

I agree with Joe.