I have come up with a couple of asymmetrical trading ideas. One is extremely scalable. ($1 billion+). I am looking for a fund or family office to work with to put on the trade at size. What would be the best way to approach / find a potential relationship like this? Thank you in advance for your answers.
Shouldn't be hard to get a meeting with a family office or a fund if you have something valuable to say. They are always looking for new ideas. However, you really need to work out a good way to present it. Most people coming with ideas like yours are usually considered crackpots... Probably because they are.....
I have the same problem. I posted this: https://www.elitetrader.com/et/threads/prediction-based-trading.351176/page-42 to show half a year of trades called with live entry and exit but nothing. I have recently made one online: https://collective2.com/details/134463089 to see if a fund will accept so we'll see what happens. I assume they'll want a track record.
If you want to market a strategy you need to understand that this is a business with an active market. Put together a pitch deck outlining your strategy, why it's different, who it is for, what your terms of an arrangement look like, and what your operational system looks like (broker, bank, etc.). Should be 10-15 slides max. Then, reach out to family offices and ask them for a conversation. They'll request a deck, which you'll then send. Rinse repeat.
Go to Fintrx.com and buy a listing of the FO community. As was mentioned create a short quick written sales package. Or you can wait for conferences to restart and attend one. Focus heavily on what distinguishes you and your process. Have well-documented success. Limit your posting on the internet. FO's that participate in listed markets want exposure where they are not already represented - so as a generalization - here in the Midwest most players are well represented in derivatives listed in the local market. There are a ton in AZ.
Congrats on hitting a personal milestone, I hope to give you some helpful ideas here: People who potentially give you money usually have trust in not just your analytic abilities, but also your personal beliefs, ethics. Therefore, the most efficient places to start asking is family and close friends, since they most likely already have some level of trust with you, on a personal level. Another benefit here is that they 're more likely to keep whatever ideas you present discrete. If nobody within your immediate family/friend circle is ready to invest, you could ask for referrals to any associate/acquaintance in the industry. Also, it'd be probably a good idea to look for internships at financial firms. Even if unpaid, building relationships in the long run could be very valuable. Make friends in the industry, and sooner or later (if your idea is legit, and uncrowded) you're bound to find someone who has capital, enough confidence in your abilities, and like you enough to want to help you.
What is your Sharpe or Sortino ratio? Your max drawdown % over the past 5 years? What is your correlation to the S&P 500? I don't actually want to know those things, but anyone who funds you will plus a bunch more. Before you spend any time trying to find funders, it's probably in your best interest to know the questions they will ask you and the criteria they use to judge investment theses as well as having those theses down on paper in a cohesive, well supported manner. You may have already have done that homework, however if you haven't then in the process of doing it you'll also answer much of the question you asked here.
@Sig was planning on it. I already have the friend and family money working. I am not looking to get investors so much as I would be interested in working with an office that was already managing large pools of capital. As a prop trader with / for them or in partnership with them.
Wouldn’t you have to pretty much disclose your strategies? If the strategies have an edge, they can re-create them. If they don’t have an edge, just statistics, that is kind of a leap of faith for them, no?
Good point. He needs a good and expensive lawyer. If he just presents the ideas, they will not trust him on just showing potential results. They want to know the ins and outs. The moment you reveal your hand, they're also free to use it if you don't have a really smart legal counsel.