Steven Cohen Plans a New Hedge Fund. Investors Are Wary.

@truetype I have heard stories about these “funds on the cheap” but I didn’t understand what’s the point. If you just need a couple extra accounts to supplement your own trading, there are cheaper options like managed accounts (disclaimer - I have no clue since I never researched it). If you going after institutional money, you need everything top of the line.

PS. I might sound frustrated about expenses because it’s the end of the year
 
sle said:
@truetype I have heard stories about these “funds on the cheap” but I didn’t understand what’s the point
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· Wants to keep some $ offshore, for whatever reason

· Hopes to open eventually to FoF investors, who are “earlier” than insitutions and usually offshore

· Wants access to better leverage & etc, via a looser regulatory environment
 
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truetype said:
· Wants to keep some $ offshore, for whatever reason

· Hopes to open eventually to FoF investors, who are “earlier” than insitutions and usually offshore

· Wants access to better leverage & etc, via a looser regulatory environment
More...

Why are FoF investors usually offshore.........if you can elaborate, Thx.
 
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truetype said:
· Wants to keep some $ offshore, for whatever reason

· Hopes to open eventually to FoF investors, who are “earlier” than insitutions and usually offshore

· Wants access to better leverage & etc, via a looser regulatory environment
More...
A 100k is a pretty high bogey to beat if you are trading your personal capital. All valid points, I guess but I can’t help but think that each one separately can be achieved by simpler means (except maybe point 2?). So in the end that means you are trying to open a fund with all the fixings and thus need to roll the right way eventually.
 
toc said:
Why are FoF investors usually offshore
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Because they historically managed $ from non-US investors (originally, largely from Switzerland) who don't want any involvement with US regulators. But the landscape is evolving. The FoFs are under continuing fee pressure, and the center of gravity of the industry is shifting a bit toward the US.
sle said:
A 100k is a pretty high bogey to beat if you are trading your personal capital. All valid points, I guess but I can’t help but think that each one separately can be achieved by simpler means (except maybe point 2?). So in the end that means you are trying to open a fund with all the fixings and thus need to roll the right way eventually.
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That's about right. A minimal boot-up AUM is $5- 10m. Otherwise the fees and hassles aren't worth it, even at the shoestring level. A typical shoestring "customer" (at least for "my guy") is a Wall Streeter with $25- 50m of his own money, plus friends/family. The hope is: run up a good track record for a few years, then upscale the service providers (legal, admin, accounting, directors, primes, FCMs) to "institutionalize" your product offering.
 
SteveM said:
Last I heard, his 'Point72 Asset Management' fund struggled in 2015 and 2016 like most other hedge funds, and he was investing a lot of his money in trying to go completely algorithmic, but found there was no free lunch there either.
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Seems like Steve Cohen has lost his edge. If he can no longer do insider trading, he still can rely on his tape-reading skills. He claims to be a great tape reader and it was this skill which gave him the good start as a fund manager. Has he also lost his tape-reading edge?
 
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