central park
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3rd tier asian arb, SRI ideas, and anything green/kyoto oriented is hot now.
good luck!
CPW
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Starting/Working for a Hedge Fund
- Thread starter ProfitTakgFool
- Start date
3rd tier asian arb, SRI ideas, and anything green/kyoto oriented is hot now.
good luck!
CPW
I'm not marketing, I have no affiliation with Green, or ILG.com, or MMS.com. These are resource I provided based on my experience.
ET has access to my PM's and if I were marketing they would certainly know by my responses to private inquiries. If I were gathering business as you suggest this thread would have been long removed. Not to mention the fact that it's ILLEGAL to advertise a private investment on a public message board. If you think I am advertising contact baron@elitetrader.com and tell him to delete this thread. If you don't contact Baron then you have to shut the hell up! Please come back and let us know how it goes!
ET has access to my PM's and if I were marketing they would certainly know by my responses to private inquiries. If I were gathering business as you suggest this thread would have been long removed. Not to mention the fact that it's ILLEGAL to advertise a private investment on a public message board. If you think I am advertising contact baron@elitetrader.com and tell him to delete this thread. If you don't contact Baron then you have to shut the hell up! Please come back and let us know how it goes!
This coming from an knucklehead who has his nose so far up Reardon Metals ass that he can't differentiate between a casual reference about blowing up a "few" accounts and "more than I can remember."
Say what you want Joker. The responses I've received from this thread have been 99% positive, both on the board and in PM. At least 2 people have told me they have started in fund, partly because of the information they received on this thread. If you still think I'm advertising contact baron@elitetrader.com. I'm not an ET sponsor so he will delete the thread if that's the case.
<b>Funny thing, there's plenty of people making accusations lately but none will take me up on my offer to do a full investigation of the facts. Contact Baron and let's get to the bottom of it. If you don't then you also need to keep your mouth shut.</b>
Say what you want Joker. The responses I've received from this thread have been 99% positive, both on the board and in PM. At least 2 people have told me they have started in fund, partly because of the information they received on this thread. If you still think I'm advertising contact baron@elitetrader.com. I'm not an ET sponsor so he will delete the thread if that's the case.
<b>Funny thing, there's plenty of people making accusations lately but none will take me up on my offer to do a full investigation of the facts. Contact Baron and let's get to the bottom of it. If you don't then you also need to keep your mouth shut.</b>
With everyone talking about the pros & cons of what PTF is discussing, why is there no sincere mention of becoming a Register Investment Advisor in a more traditional form from you nay-sayers?
What I mean by this is an Investment Advisor/RIA [or a CTA] manages money for their clients' individual accounts, typically requesting trades as block transactions under one master account. In this form, there is obviously added risk to the advisor because he must take on the added responsibility of being a legal fiduciary. That means that he/she would be responsible for putting the clients needs before his own/own firm's. You would document this with an risk tolerance analysis and investment plan for each client which is a headache to be sure, but it allows development of client relations skills as well as helping to acquire credibility within your community. It also gives your the ability to take on institution clients, such as state retirement funds, all without ever heading to wall street or begging GS for one internship.
The amount of paperwork, disclosure, and compliance required typically [though this is changing] exceed that of a hedge fund and through normal operations is the perfect prep to starting a hedge fund as it requires the same skill set, except when you start your fund, you loose some of the individual client paperwork requirements [because you're no longer managing individual client investment objectives] and also get to take a portion of the profits rather than only your management fee. The key thing here is that you would develop your track record, grow a client base, and master many of the pitfalls that come with being a money manager.
It would seem to me, that if you want to start a Hedge Fund early on, you know that you want to be a money manager right? But we all know that the easiest way into the production side of financial services is as an Advisor [which almost no one on this forum wants to do -- at least for any real period of time] right? Why not start where the two intersect ?
You will be a far more disciplined hedge fund manager if you have experience managing other peoples money right from the outset than you would as a prop trading or trading for yourself. You won't need to make any philosophy adjustment to dealing with clients because you already will have developed your "beside manor". And -- this is the big one -- if you start off as an Investment Advisor, you will have the ability to MARKET yourself/business openly to a pretty broad array of potential clients. Once you have done well, start a separate entity that will be your hedge fund and then YOU select who you want to offer the opportunity from your current client base, asking them to refer you to like minded individuals who would be interested in such an opportunity. Meanwhile, you bring on one or more newer advisors to taking on managing the RIA practice while you manage the hedge fund... Presto! Diversification of income, vertical integration of strategy, track record development & you will have serious funds to carry you through before you actually start taking a salary from the fees of the Hedge Fund.
So for you guys that have such great pedigrees, why is it that none of you could come up with this, but the former thug turned computer geek with only 3 years from a state school can map this out so well? Seriously?
I think people on this site need to start defining/redefining what success meanings, recognizing that implementation of strategy to achieve or exceed the desired goal without too great a cost is all it really defines.
And BTW, I commend PTF for creating this thread. Also, you guys who went the CTA route instead of the RIA -- which essentially are the same just have differing regulatory bodies & securities instruments -- might have an advantage over RIA's that are exclusively equities based. I will be re-examining it well.
My $0.02.
DJ
What I mean by this is an Investment Advisor/RIA [or a CTA] manages money for their clients' individual accounts, typically requesting trades as block transactions under one master account. In this form, there is obviously added risk to the advisor because he must take on the added responsibility of being a legal fiduciary. That means that he/she would be responsible for putting the clients needs before his own/own firm's. You would document this with an risk tolerance analysis and investment plan for each client which is a headache to be sure, but it allows development of client relations skills as well as helping to acquire credibility within your community. It also gives your the ability to take on institution clients, such as state retirement funds, all without ever heading to wall street or begging GS for one internship.
The amount of paperwork, disclosure, and compliance required typically [though this is changing] exceed that of a hedge fund and through normal operations is the perfect prep to starting a hedge fund as it requires the same skill set, except when you start your fund, you loose some of the individual client paperwork requirements [because you're no longer managing individual client investment objectives] and also get to take a portion of the profits rather than only your management fee. The key thing here is that you would develop your track record, grow a client base, and master many of the pitfalls that come with being a money manager.
It would seem to me, that if you want to start a Hedge Fund early on, you know that you want to be a money manager right? But we all know that the easiest way into the production side of financial services is as an Advisor [which almost no one on this forum wants to do -- at least for any real period of time] right? Why not start where the two intersect ?
You will be a far more disciplined hedge fund manager if you have experience managing other peoples money right from the outset than you would as a prop trading or trading for yourself. You won't need to make any philosophy adjustment to dealing with clients because you already will have developed your "beside manor". And -- this is the big one -- if you start off as an Investment Advisor, you will have the ability to MARKET yourself/business openly to a pretty broad array of potential clients. Once you have done well, start a separate entity that will be your hedge fund and then YOU select who you want to offer the opportunity from your current client base, asking them to refer you to like minded individuals who would be interested in such an opportunity. Meanwhile, you bring on one or more newer advisors to taking on managing the RIA practice while you manage the hedge fund... Presto! Diversification of income, vertical integration of strategy, track record development & you will have serious funds to carry you through before you actually start taking a salary from the fees of the Hedge Fund.
So for you guys that have such great pedigrees, why is it that none of you could come up with this, but the former thug turned computer geek with only 3 years from a state school can map this out so well? Seriously?
I think people on this site need to start defining/redefining what success meanings, recognizing that implementation of strategy to achieve or exceed the desired goal without too great a cost is all it really defines.
And BTW, I commend PTF for creating this thread. Also, you guys who went the CTA route instead of the RIA -- which essentially are the same just have differing regulatory bodies & securities instruments -- might have an advantage over RIA's that are exclusively equities based. I will be re-examining it well.
My $0.02.
DJ
Thanks DJ, an excellent response and great suggestions. My initial goal was to do just that -- go the advisor route, trade clients funds individually (and/or through a master), and then start a hedge fund with the connections generated from that. The thing that stopped me is I had become so accustomed to trading my own account and not having to work 12 hour days doing cold calling that it was impossible for me to go back to that grind. However, if you aren't currently trading your own account and you're young and energetic enough to log those kind of hours I think DJ's idea is exactly the way to go. Build a client base, grease their palms, and go from there.
Hey PTF, a great thread indeed. Thanks for caring enough to share the info....
I am in the process of staring incubator fund myself, mainly for the purpose of creating marketable track record. I have been trading options with similar objective that you have: consitant profits, month after month, at lowest risk possible. My edge is not really knowing where the mkt will go, but rather what to do if it moves against me. With optios, you can have set ups where you make even more money if the underlying moves against you, up to a certain point of course.
Gotta question for you: Referring to what you wrote below, which Law firm would you actually recommend out of thes two links? Did you work with either one? I contacted the first one and they gave me a quote of $2,500 to set up incubator, which I think it's reasonable provided they get me covered legally so I can sleep well and concentrate on trading. I constantly wonder if they are reputable enough and will they do job well. I just don't want to get screwed down the road because lawyer did not tell me something which they should have. Also, in your experience, how much would incubator cost me in the first year. My understanding is that after fund is set up, I am only obligated to do taxes at year-end and that's it, which implies rather limited costs.
Your advice and/or any comments are much appreciated.
Cheers,
RK.
""""The first thing you need to do is do as much research on hedge funds as you possibly can. You can start with the following links and Google "Regulation D" and all of the various rules that fall into Regulation D. Also, be aware of the difference between an "accredited" and "non-accredited" investor. These are sometimes referred to as "qualified and non"
http://www.greencompany.com/HedgeFunds/index.shtml
http://www.investmentlawgroup.com/
Go to: http://www.moneymanagerservices.com/ pay your $250 to join and read every document they have on their site. After you finish these steps you'll have an extremely good understanding about how hedge funds operate and what it takes to start one.""""
I am in the process of staring incubator fund myself, mainly for the purpose of creating marketable track record. I have been trading options with similar objective that you have: consitant profits, month after month, at lowest risk possible. My edge is not really knowing where the mkt will go, but rather what to do if it moves against me. With optios, you can have set ups where you make even more money if the underlying moves against you, up to a certain point of course.
Gotta question for you: Referring to what you wrote below, which Law firm would you actually recommend out of thes two links? Did you work with either one? I contacted the first one and they gave me a quote of $2,500 to set up incubator, which I think it's reasonable provided they get me covered legally so I can sleep well and concentrate on trading. I constantly wonder if they are reputable enough and will they do job well. I just don't want to get screwed down the road because lawyer did not tell me something which they should have. Also, in your experience, how much would incubator cost me in the first year. My understanding is that after fund is set up, I am only obligated to do taxes at year-end and that's it, which implies rather limited costs.
Your advice and/or any comments are much appreciated.
Cheers,
RK.
""""The first thing you need to do is do as much research on hedge funds as you possibly can. You can start with the following links and Google "Regulation D" and all of the various rules that fall into Regulation D. Also, be aware of the difference between an "accredited" and "non-accredited" investor. These are sometimes referred to as "qualified and non"
http://www.greencompany.com/HedgeFunds/index.shtml
http://www.investmentlawgroup.com/
Go to: http://www.moneymanagerservices.com/ pay your $250 to join and read every document they have on their site. After you finish these steps you'll have an extremely good understanding about how hedge funds operate and what it takes to start one.""""