Starting a small Hedge Fund??

'Charge like 200 a month, get a 1000 investors and make 200k a month'

1000 investors!!!!!!!!!!!!!! are you talking atleast 5 years of top notch performance which is quoted and rated by Hulberts Digest. How about $50 a month and aim for 200 investors/subscribers. $200 a month is usually the rate of the futures signal services and 80% of them blow up after 6 months taking all their subscribers with them. Even the top notch performers do not reach 100 units as subcribers.
 
hey, as far as the lawyers fees are concerned...would it be possible for someone to just copy and paste everything from a mutual fund disclaimer, or a hedge fund prospectus which are public...

then you just change the names, and some details, get it REVIEWED by a lawyer, as opposed to him doing all this..would'nt this be a lot cheaper?

Also, i dont remember reading about if the HF should be a LLC or a LLP or a INC., and if it should be registered in Delaware, or the Caymans? These i think are very important issues!
 
(From the Trading Thread).

So, according to Bloomberg and Goldman Sachs the new fee structure is a huge difference.

Old way, 2% management fee - now zero.

Old 20% of all profits - now.... fund must pay 10% to investors first before GS gets anything, and then GS gets 10% of profits on the rest of whatever profits there might be.

This is quite a change to attract money, IMO. This will change the whole idea about wanting to run a hedge fund. I'm not saying every fund will have to change (obviously they won't have t0), but sometimes Goldman does lead the way.

I'm also not saying that this means more downside for these funds, but I am saying that it shows a much stronger desire to attract money.

What this might do is take the incentive away from both investors and potential fund managers wanting to start a HF. We'll have to see how things go with other funds.

Don
 
i wouldn't write off the entire industry. there are large redemptions out of market neutral quant funds. opens a door to other funds, ie short biased, multistrategy, etc. one door closes, another opens.

Quote from Don Bright:

(From the Trading Thread).

So, according to Bloomberg and Goldman Sachs the new fee structure is a huge difference.

Old way, 2% management fee - now zero.

Old 20% of all profits - now.... fund must pay 10% to investors first before GS gets anything, and then GS gets 10% of profits on the rest of whatever profits there might be.

This is quite a change to attract money, IMO. This will change the whole idea about wanting to run a hedge fund. I'm not saying every fund will have to change (obviously they won't have t0), but sometimes Goldman does lead the way.

I'm also not saying that this means more downside for these funds, but I am saying that it shows a much stronger desire to attract money.

What this might do is take the incentive away from both investors and potential fund managers wanting to start a HF. We'll have to see how things go with other funds.

Don
More...
 
Quote from bsivia:

hey, as far as the lawyers fees are concerned...would it be possible for someone to just copy and paste everything from a mutual fund disclaimer, or a hedge fund prospectus which are public...

then you just change the names, and some details, get it REVIEWED by a lawyer, as opposed to him doing all this..would'nt this be a lot cheaper?

Also, i dont remember reading about if the HF should be a LLC or a LLP or a INC., and if it should be registered in Delaware, or the Caymans? These i think are very important issues!
More...

There is no SHOULD with respect to hedge funds and whether it is LLC or LP or if it is in Delaware.

A hedge fund can be an LLC or an LP although an LP is the more common form. An LLP is really only used for professional firms like law firms and is not needed for a hedge fund at all. The actual fund itself should not be a corporation as that is a pain in the ass so no Inc. at all.

The state of formation is irrelevant really although it is nice to use Delaware since they have partnership and LLC friendly laws.

As for the Caymans it does not matter if you have all U.S. investors. Off shore locales matter more if you have offshore investors.

I have drawn up hedge fund documents in the past and reviewed these in general as a lawyer.

Paying $25k to a big firm is a rip off unless you have a HUGE fund and need big time representation for complex things. For start up hedge funds you can do basic LP for fund, LLC for GP and disclosure documents. As for what kind of investors you can get and SEC rules on private offerings and soliciation you are on your own.
 
Quote from cashmoney69:

This is why you start your own news letter service instead. Charge like 200 a month, get a 1000 investors and make 200k a month :) . It'd be easy to keep it "underground" too if need be.
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interesting.. i run an options advisory.. theoptionsreport.com, and was interested in going the other way by running a fund.

I provide autotrade for optionsxpress and thinkorswim, and run it like a fund. I just dont look into personal accounts.

Problem is that I might make more if i was paid on performance, and it would be easier to execute trades myself and manage risk, versus going throught the broker and the individuals.
 
Performance

* 2007* - Trade Log (+1446% cumulative in 2007)
* 2006* - Trade Log (+982% cumulative in 2006)
* 2005* - Trade Log (+4,900% cumulative in 2005)
* 2004 - Trade Log (+1,500% cumulative in 2004)



Why o why would you bother with either a fund or an advisory site....

Starting with just $100k. Oh no, that doesn't work. Starting with just $10k (surely you had that much back in 2004) you made $1.2bln this year.

Even if you started with just $1000 you made a cool $125mln.

Or, starting reallly on a shoestring with just $100 you made $12.5mln this year so far.
 
Quote from BJL:

Performance

* 2007* - Trade Log (+1446% cumulative in 2007)
* 2006* - Trade Log (+982% cumulative in 2006)
* 2005* - Trade Log (+4,900% cumulative in 2005)
* 2004 - Trade Log (+1,500% cumulative in 2004)



Why o why would you bother with either a fund or an advisory site....

Starting with just $100k. Oh no, that doesn't work. Starting with just $10k (surely you had that much back in 2004) you made $1.2bln this year.

Even if you started with just $1000 you made a cool $125mln.

Or, starting reallly on a shoestring with just $100 you made $12.5mln this year so far.
More...

Whos performance stats are these?
 
Quote from thetrendfollowe:

Whos performance stats are these?
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<A HREF="http://theoptionsreport.com/performance.html" TARGET="***">theoptionsreport.com</A>, mentioned in this <A HREF="http://www.elitetrader.com/vb/showthread.php?s=&postid=1572478#post1572478" TARGET="***">post</A>.
 
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