Any thing public traded and can be marketed to the general public like an ETF is of course gonna be way more complex and costly compared to a vanilla private hedge fund that can be only pitched to qualified investors where the regulation is more free.
What's a hedge fund structure worth to you?
- Thread starter Clayart
- Start date
Even if an existing fund gets taken over by a new manager/team they would still have to redo the regulatory filling under the new principals and administrator with the regulators. Along with the unknown tax and legal liability that can be coming with the old entities.
So doesn't make much sense to buy an old fund as a startup. And the existing LP's probably signed up to invest with the old manager based on their strategy and experience.
And that is exactly where the value might lie in such a service where-in a new fund can focus on raising capital and save on the cost of having a full time employee, by outsourcing this work to an aggregator who directly deals with all the existing service providers here-by saving time and money for the new fund, along with bringing the experience of dealing with the providers and contacts they have already established.
Thanks a lot for you replies. Really appreciate it.
It is always unfortunate how many opinions there are and so little knowledge available publicly, yet as a consolation the professionals are no better because we have spoken to them, there are companies that can provide an off the shelf fund costing $20k to $50k in setup and allocated 20% for maintenace, $100,000s for a bespoke setup because I had to help write a prospectus for one, jurisdiction location is always an interesting choice as today there is one jurisdiction that stands out above all others.
As a fund manager it is all very nice to have the interior decorator but first you need the house, namely a trading architecture available to you, or alternatively $millions in your own seed capital with a strategy, otherwise it will all be for nothing, I know because I've worked with the people who set everything up from off the shelf to bespoke and also have the architecture to plug straight in to a fund that can seed in as little as one quarter.
You have companies like AKJ but their average AUM is $5million, and you have to be a trader under their umbrella, a bit like IB Friends & Family, the lowest tier of fund setup excluding crypto and that is the only free information you get which is more than most could provide.
The desperation in people to create a revenue stream in 2023 is palpable, sure you could provide services without this knowledge and with any infrastructure but the probability for success is basically zero, you would the prop trading entity of the fund setup world, +90% failure rate.
Thanks a lot for you input.
Yes, having the structure alone, without the underlying trading strategy or investment thesis and the seed capital to fund the strategy would be like putting the cart before the before.
But some traders do want to build an auditable track record based on their trading strategy to have the option of raising funds for trading other peoples money if these so choose down the line.
And just like there law firms all shapes sizes and caliber so there are fund formation agent of all shapes sizes and caliber catering to different category of funds.
And of course when it comes to jurisdiction U.S. reins supreme both in terms of fund domicile and exchange choice and depth.
Some funds do have a feeder fund setup in the Cayman Islands or Bermuda, but that mostly to have their Non - U.S. investors avoid U.S. Tax obligation but the master fund is almost always based in the U.S.
And then there are the incubator funds where in they have an umbrella where different small sub funds operate under the main fund and make use of shared resources, thereby reducing cost, but again it is a problematic structure risk management and legal liability wise as the misdoings of any one of the units under the umbrella can cause problem for all the other funds.
Failure and success is the two outcomes of any business and I agree that there is a higher probability of failure then there is so success, but if you do look on a long enough time frame most business even the S&P 500 index composites fail and get replaced by new successful company, that's circle and cycle of business.
Thanks.
Sure, I get you are trying to obtain the correct information by making mistakes and hoping that someone smart/experienced will give you the right information but it doesn't work that way now, it used to but today, not.
"But some traders do want to build an auditable track record based on their trading strategy to have the option of raising funds for trading other peoples money if these so choose down the line." - they use AKJ or IB Friends & Family for however many years it takes as already explained.
"And of course when it comes to jurisdiction U.S. reins supreme both in terms of fund domicile and exchange choice and depth." - no it does not, the investors will often come from the US but the fund domicile is something completely different that is currently in fluid change, the past will not be the future.
Just as well I know the entity that has already done using forward projections what you are wanting to do looking in the mirror, they don't come to me to do the implementation work for nothing, you are using past projections/information/knowledge in all of your statements.
The experienced conclusion is that you are targeting the 'wishful thinkers' on a downward trajectory with more money than sense without any trading or architecture supporting them, what could go wrong, we've had these types as well but we were smart enough not to progress it to investor funding.
They wanted access to a +3 Sharpe methodology short tracking 3-5yrs down to 3-5moths without their putting all the ducks in a row, and us telling them to come back after a few years of AKJ or IB Friends & Family before it progressed too far, you would not do this, as I said the need for a revenue stream in 2023 is palpable.
It's always funny to see people with experience responding with the same knowledge presented in a different way to those who don't spend 24hrs digesting the information, it amuses me
While do appreciate your insights that you must gave gathered from your personal experience or learning.Sure, I get you are trying to obtain the correct information by making mistakes and hoping that someone smart/experienced will give you the right information but it doesn't work that way now, it used to but today, not.
"But some traders do want to build an auditable track record based on their trading strategy to have the option of raising funds for trading other peoples money if these so choose down the line." - they use AKJ or IB Friends & Family for however many years it takes as already explained.
"And of course when it comes to jurisdiction U.S. reins supreme both in terms of fund domicile and exchange choice and depth." - no it does not, the investors will often come from the US but the fund domicile is something completely different that is currently in fluid change, the past will not be the future.
Just as well I know the entity that has already done using forward projections what you are wanting to do looking in the mirror, they don't come to me to do the implementation work for nothing, you are using past projections/information/knowledge in all of your statements.
The experienced conclusion is that you are targeting the 'wishful thinkers' on a downward trajectory with more money than sense without any trading or architecture supporting them, what could go wrong, we've had these types as well but we were smart enough not to progress it to investor funding.
They wanted access to a +3 Sharpe methodology short tracking 3-5yrs down to 3-5moths without their putting all the ducks in a row, and us telling them to come back after a few years of AKJ or IB Friends & Family before it progressed too far, you would not do this, as I said the need for a revenue stream in 2023 is palpable.
It's always funny to see people with experience responding with the same knowledge presented in a different way to those who don't spend 24hrs digesting the information, it amuses me
I would be glad if the conversations avoid personal shots and name calling or belittlement for those with less knowledge of the subject or who have a zeal to start in a field of which they don't have as much knowledge as a professional does, freedom to try is what makes capitalism a viable model.
Don't take it personally but it had to be said in the best interest of having respectful conversations on this forum.
Thanks.
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No matter how professional you try to project yourself above, you are targeting services to low hanging fruit who have no money today, where that low hanging fruit are playing with investors money which they will lose using any of the scenarios you present, you are trying to educate yourself how to not be liable for that failure, never expecting someone with experience would point out this exact fact, that is education
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Thanks for your input, is it okay to build a scenario or theory based on assumptions like "low hanging fruit" or that they are meant to lose.No matter how professional you try to project yourself above, you are targeting services to low hanging fruit who have no money today, where that low hanging fruit are playing with investors money which they will lose using any of the scenarios you present, you are trying to educate yourself how to not be liable for that failure, never expecting someone with experience would point out this exact fact, now that is true education
Also I would like to choose not to engage in further conversation with you if you continue with your rhetoric of putting some down to make yourself look good and know-it-all, seen-it-all guy, superior than you guy.
Thanks.
Also didn't expect some like you who claims to be an experienced professional to stoop down to plain ol' mud slinging and trying to see what sticks. but it's your choice.No matter how professional you try to project yourself above, you are targeting services to low hanging fruit who have no money today, where that low hanging fruit are playing with investors money which they will lose using any of the scenarios you present, you are trying to educate yourself how to not be liable for that failure, never expecting someone with experience would point out this exact fact, that is education