Starting a public fund

[destriero]

I am a PM at a family office located in Dallas (hence no structure posts from me). We are starting a public-facing fund. We have an ISDA and incomparable financing. We trade/access the following markets:

Rates; swaps; equities (listed and OTC); vol (vanilla, OTC, exotics, var and gamma swaps).

We're looking for a few people with legit experience, whether it be buy or sell-side, or a vetted risk-adjusted track record. You eat what you kill; $120K draw against 15% payout. Some will be trading larger books than others, but the draw and payout is non-negotiable. Obviously you're not putting in any equity. You pitch and you're offered an allocation (or not). There is no wiggle room on the 15%. Everybody has to eat.

Dallas is preferable, but it's possible that you could manage it remotely with access to Telepresence. The office is on McKinney Ave.

My email is my first name at gmail, but PM will do.

Please no spot FX, bucket shop shit. No FX at all; listed or otherwise.

 

[Overnight]

...$120K draw against 15% payout. Some will be trading larger books than others, but the draw is non-negotiable. It's not a profit center. Obviously you're not putting in any equity. You pitch and you're offered an allocation (or not). There is no wiggle room on the 15%. Everybody has to eat...

Isn't the draw considered putting in equity? As in, if you do not make that draw each period, you owe the balance? Would you pursue legal action against people who would refuse to pay back the draw owed if they are let go or leave?

 

[destriero]

Isn't the draw considered putting in equity? As in, if you do not make that draw each period, you owe the balance? Would you pursue legal action against people who would refuse to pay back the draw owed if they are let go or leave?

No, you have zero liability on the draw. It's simply too far into the weeds to discuss those details here. Good question, however. Ostensibly you would be let go if you're down 12% at the end of the year, but the draw is yours to keep. To be clear: it is a draw against your 15%. Not a salary unless you suck!

 

[Overnight]

...To be clear: it is a draw against your 15%. Not a salary unless you suck!

Ooof, so you have to make more than $120K with your 15% profits to escape the draw and make money for yourself. Too rich for my blood!

 

[destriero]

There is a risk floor. You'd be cut loose if you hit it (realtime marks) and obviously the draw would end there.

 

[Robert Morse]

Isn't the draw considered putting in equity? As in, if you do not make that draw each period, you owe the balance? Would you pursue legal action against people who would refuse to pay back the draw owed if they are let go or leave?

They are looking for those that can earn $800k on the allocation per year, you get 15% of that. Plus, the products are not retail oriented.

 

[destriero]

Ooof, so you have to make more than $120K with your 15% profits to escape the draw and make money for yourself. Too rich for my blood!

I agree. This is a nine-figure FO. This is not some deposit prop crackhouse. I don't understand the confusion. Regardless... "you" are being paid $120K ((n*0.15)-$120K) unless you blowup prior to the end of the year and you keep the draw paid to date.

 

[Overnight]

...Plus, the products are not retail oriented.

Yeah I got that when des clarified it for me...I would never feel comfortable swinging around that sort of equity in any endeavor at this time. OPM is scary. Ahh, that reminds me, I forgot to respond to your PM...

 

[destriero]

No, we're not paying for your Bloomberg. You'd have a cube in Dallas with a BBG and comms. Remote guys would need to sell that hard and have suitable comms and redundancy.

 

[Overnight]

...Regardless... "you" are being paid $120K ((n*0.15)-$120K) unless you blowup prior to the end of the year and you keep the draw paid to date.

I only know the idea of job draw from the standard sales area of salary draw v. commish. You have, say, a monthly draw. You have say $10K draw + commission. Your first $10K income goes to paying your draw, and the excess commish + salary is your pay.

If you do not make your $10K draw because you make only $5K commission, then you make nothing, and the extra $5K is owed on next month's drawa gainst your salary. So next month you have $15K draw. So you now have to make $15K commish to meet the draw. And if you have a bad string of months, you can get into deep water. I am not sure about it all exactly, the concept makes my head swim.