Starting a Fund - What is the most efficient way?

J

JoePub

Hi fellow Elitetrader members,

This is my first message in this forum. I have been researching how to start a fund for quite sometime but now more than ever it seems that it is cumbersome, complex and quite expensive. Although I am not sure if this is the right place to ask, looking at the great community you have built and responses you give, I believe that maybe I can get better info than what I have found so far (i.e. opinions not based on facts or experience, or obvious advices like talk to a lawyer, etc).

I would appreciate if you could share your experience, if you have launched your own fund, the tools or services you use, cost estimation, anything that you consider valuable.

Thank you in advance for your thoughtful recommendations.
 
Perhaps look at the performance of CTA's, there are some free sites like IASG.com. Check out their performance, high water mark, mgmt & performance fees, and their AUM - to see what investors are biting at and gives you an idea of what the CTA's are making. You don't have to be the best, just competitive will do. Compare all of the metrics and see how they stack up against yours, you need at least 2 years. I think the first step is to be a member of the NFA, than you can apply to become a CTA for I think $1,500 per year - if your approved.
 
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I'd be happy to advise you but not in a public forum. If you want my advice, email me your name, phone number, a description of your strategy, what asset classes you trade, what your track record is, where you are located and a basic bio . Then I'll give you a call to discuss you options.

Bob
 
newwurldmn said:
CLEARLY A TROLL THREAD.
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"Possible to quite likely"; never a certainty.

Who's going to be the first to mention specialist legal advice?

Oops: it was me, wasn't it? ...
angry-smiley-023.gif
 
1) NO! It is not a troll thread. Why?
2) I did search. Most of the advice that I found is +3-4 years old.
3) @Xela - I am not looking for legal advice. Feel free to add a disclaimer if you feel better.
PLEASE don't waist keystrokes if your objective is not to help (i.e. who is the troll)?
Any help/guidance will be appreciated.
 
Robert Morse said:
You question is way to general and no one here has enough information to help you without knowing more about your situation.
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Actually it is quite simple, most funds are incorporated in Caymen or BVI, if you accept US funds you need a master feeder setup. There are due diligence requirements for 'know your customer' and in certain cases minimum wealth requirements, most legal documents can be bought off the shelf.

There are other jurisdictions which are also simple without red tape but not the prestige, but then you get in to the details of the problem. You will need a good Sharpe Ratio, Beta, Alpha and history although that depends on trading timeframe. Then you have your own personal situation to receive profits, high watermarks, fee and performance percentages the standard being 2 & 20.

Lastly you have your methodology. As an example, some people work with have institutional indicators, use the retail versions of them, and methodology which fast tracks fund launch, as it works down to minute timeframes close to HFT. Received some preliminary figures for Q3 2016 with Sharpe of 3.44, Beta of -2.34, Alpha of 25%, there are four funds from low risk per annum on monthly moves to high risk per week on hourly moves, if all four are funded it averages out to around +25% net per annum.

Once you have all that it's as complex as you want to make it, but as with all things trading simplicity is the best starting point.
 
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