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Set up a hedge fund without investment manager/advisor
- Thread starter marioeva
- Start date
My impression is that the OP doesn't have the capital to hire an administrator right off the bat.
If you give someone direct access to your IB statements then that should take care of the issue of statement validity (non-trading access to your account). If you are merely looking for capital from a seeder this would suffice in some cases.
If you give someone direct access to your IB statements then that should take care of the issue of statement validity (non-trading access to your account). If you are merely looking for capital from a seeder this would suffice in some cases.
Quote from EquityGuy4321:
My impression is that the OP doesn't have the capital to hire an administrator right off the bat.
If you give someone direct access to your IB statements then that should take care of the issue of statement validity (non-trading access to your account). If you are merely looking for capital from a seeder this would suffice in some cases.
Thank you for the advice.
If I am aiming for investors other than seeders like pension funds or family offices, do I need to set up the fund and hire administrator and auditor? Thank you again
You need to have a significant amount of AUM under management to attract those kinds of clients. I wouldn't worry about it if you are just starting out on a small account.
But, in general, yes.
But, in general, yes.
I think it all depends what your plans for the future are. No serious investor with millions of $ (Pension Plan, FofFunds, big priv investors) will touch your fund without track record from the reputable Administrator/Audit firm/Law Firm. If you are aiming at smaller investors, with tens of hundreds of thousand of $ you still need Administrator/Audit/Law firm, but i guess doesn't have to be from the top shelf.
Quote from marcus1ca:
I think it all depends what your plans for the future are. No serious investor with millions of $ (Pension Plan, FofFunds, big priv investors) will touch your fund without track record from the reputable Administrator/Audit firm/Law Firm. If you are aiming at smaller investors, with tens of hundreds of thousand of $ you still need Administrator/Audit/Law firm, but i guess doesn't have to be from the top shelf.
Understood.
I am aiming at serious investors. I have already put decent amount of my own money into the account.
At this stage, I am only looking after trade record. I am willing to pay the fees to get it done properly. If I can save couple grands by delaying the unnecessary services, it will be great.
Because I have not started marketing yet and I am not accepting other peoples money, I do not think I need lawyer to write the offer memorandum or advise on tax issues. When I start marketing in the future, I will get a good lawyer to protect myself.
In order to get track record accepted by the serious investors, can I just give the auditor direct access to my trading account ? Do I have to hire administrator now?
Have I missed anything else?
Thank you.
Quote from marcus1ca:
I maybe wrong here but personally don't think that 'serious investors' will look at your track record only, unless you have legitimate fund in place which is set up and running with all the 'safeguard' services as mentioned before.
I feel the same way... Given my situation, I think administrator and auditors are must. Lawyer and setting up investment mangager can be delayed
It's your money. If you want to go after institutional investors then you will need the whole deal...accountants, lawyers (unless you are one yourself), administrators, auditors, compliance people, etc. Post-Madoff, most of these investors also look at the quality of the support you use, so don't think you can cut corners and still get money from CalPERS.
If you want to establish a track record that you can use to raise money from non-institutional sources then you don't need all this.
Also, nothing prevents you from just trading and having someone audit your returns sometime down the road when you (hopefully) have the money to pay for it.
If you want to establish a track record that you can use to raise money from non-institutional sources then you don't need all this.
Also, nothing prevents you from just trading and having someone audit your returns sometime down the road when you (hopefully) have the money to pay for it.
Quote from EquityGuy4321:
It's your money. If you want to go after institutional investors then you will need the whole deal...accountants, lawyers (unless you are one yourself), administrators, auditors, compliance people, etc. Post-Madoff, most of these investors also look at the quality of the support you use, so don't think you can cut corners and still get money from CalPERS.
If you want to establish a track record that you can use to raise money from non-institutional sources then you don't need all this.
Also, nothing prevents you from just trading and having someone audit your returns sometime down the road when you (hopefully) have the money to pay for it.
Good point. Thank you very much