Starting a Hedge Fund (Slide Deck)

Jack1991

Jack1991

Hi All,

As part of my masters project we have put together a lot of documentation and presentations regarding starting a quant hedge fund, which I think could be useful for this community.

We have a couple of slide decks:
  1. Data Driven Investments: Highlights the business process that hedge funds need to go through. This includes starting a hedge fund, raising capital, third party services providers, and flow of capital.
  2. Development Tools: A brief presentation on the tools we are using in the development of mlfinlab. It can also be seen as our way of work. TLDR: Github as a developer platform, Travis-CI for continuous integration (code style checks, 100% code coverage, unit test checks, documentation, push to PyPi Index), Pycharm as a dev-environment, Jupyter Lab as a research environment.
  3. Quantcon 2018: A quick review of our experience at Quantcon. The presentation is based on the keynote lecture by de Prado: The 7 Reasons Most Machine Learning Funds Fail.
We have also written quite a bit on:
  1. 3rd Party Service Providers
  2. Sources of Capital
  3. Founding document
Our research is focused on machine learning in finance. Also have a few presentations there plus our open source code that anyone could make use of.

Hope that you find this useful.

Link to project: http://www.quantspor...rce-hedge-fund/
 
Jack1991 said:
Thanks for the feedback. We are following the Lean Startup principals in our project and its really noteworthy to see that there is a low demand for start-up documentation.
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I often find myself as a sounding board for "traders" looking to start a business managing money with either a pooled asset or with SMA. We help advise them and walk them through the process and provide suggestions for service providers such as formation specialist, admins, accountants etc. A large number are not ready to make the jump to this as they start with the idea that just making money trading should be enough for investors to jump in. We always start with:

A verifiable track record.
A tear sheet and presentation that shows your monthly returns after all fees, typical metrics, bio, description of strategy, risk management etc.

If they get do the work to put this in place, they often give up.
 
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Robert Morse said:
I often find myself as a sounding board for "traders" looking to start a business managing money with either a pooled asset or with SMA. We help advise them and walk them through the process and provide suggestions for service providers such as formation specialist, admins, accountants etc. A large number are not ready to make the jump to this as they start with the idea that just making money trading should be enough for investors to jump in. We always start with:

A verifiable track record.
A tear sheet and presentation that shows your monthly returns after all fees, typical metrics, bio, description of strategy, risk management etc.

If they get do the work to put this in place, they often give up.
More...

Do you think PE/VC Firm mixed with some trading is possible ? I feel the markets are increasingly becoming random with passive money dictating, relying on trading too much can leave a company exposed to a average or bad year... Tell me Bob, what do you think is the criteria for starting a PE/VC Firm ? Will a good trading record help for PE/VC or it's irrelevant ?
 
Stockolio said:
Do you think PE/VC Firm mixed with some trading is possible ? I feel the markets are increasingly becoming random with passive money dictating, relying on trading too much can leave a company exposed to a average or bad year... Tell me Bob, what do you think is the criteria for starting a PE/VC Firm ? Will a good trading record help for PE/VC or it's irrelevant ?
More...
I do not deal with either, but that said, I would say if you come from a big bank or other firm, have a great background or speciality and have the ability to raise capital scale, it might work. You can do that with $5mm to $25 mm. You need $200mm to start,

I typically deal with equity/option managers or CTAs that trade listed products.
 
No period in history (of the buy side) has seen some dramatic underperformance to the benchmarks. It's really difficult for start ups to maintain the interest of OPM unless you're running a splinter fund.
 
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