Starting Hedge Fund or Mutual Fund

[trendtrader2005]

From a learning/educational perspective, what is involved with starting a Mutual Fund versus a Hedge Fund?

I see so many mutual funds out there, with pretty meager performance (most UNDERperforming the indexes), and time and time again they have up to and more than $500M under management.

Look at this slide show,

http://images.businessweek.com/ss/05/03/fundmanagers/1.htm?slideShowSpeed=0

These are the "top" mutual fund managers in 2005, yet none of them knock my socks of in terms of performance.

If I had $5M to invest, why would I go "mutual fund" versus hedge fund ala John Henry?

Thanks

 

[profitfromprice]

Quote from trendtrader2005:

From a learning/educational perspective, what is involved with starting a Mutual Fund versus a Hedge Fund?

Thanks

Hi trendtrader2005,

This one has a pretty good information about what is involved in setting up a hedge-fund.

http://www.hedgefundworld.com/forming_a_hedge_fund.htm

I also have one question: If I want to start a limited partnership with money raised mostly from friends and family (some of them are not qualified/accredited investors) for investing/trading stocks, can this be done without violating any security laws? I do want to get 20% of the profit as a general partner.

Can someone please advise?

(Hint- I know there weren't any hedge funds rules or regulations at that time but what was the structure that Warrent Buffett had when he started his firm in which he had profit sharing terms?)

Thanks a lot for your time.