For the most part that's what it is. And Heech confirmed for me that it was indeed the firm I thought it was. Unfortunately this business is all about who you know. I know guys in Chicago that have traded flat the last 2 years who are raising money right and left and here you have Heech who is putting up great numbers and nothing. That's how this business works. At some point you have to pay to play.
Just curious, are your registered as a CTA and if not, why? The new laws have a exemption for fund managers who are CTAs from registering with the SEC as investment advisers.
Wow, folks are truly getting desperate with these bogus creative offers. This is the same garbage psuedo funds did in the 2005 era when they 'hired" you to be a hedge fund trader but you had to put up your own funds as a loss guarantee. Seriously, this IS NOT INSTITUTIONAL money as that term is normally used. Your reputation may be trashed if you take this type of weird bogus deal. If you don't want to be forever branded I would run not walk away from that offer.
Looks like a bad deal. Trying to rush do to greed might work and speed things along by a few years, at the risk of seriously damaging your business. If you give parasites like this leverage on you it never ends. Your first setback and "poof" your business is gone. Of course perhaps you will make a fortune before that happens but it is still operating from weakness with scared money. An alternative is to bring on your own sales partner who can focus on building the business so you can focus on the trading as soon as possible. If you let yourself (the value creator) become the back office for someone else's front you build your business on quicksand.
I just had a bit of a "duh" moment. I could achieve exactly the same desired outcome just by opening a managed account for myself with a total of $15mm, and just notionally fund 10%. (In reality, probably 20%.) I could then claim, with all accuracy and legality, $10-15mm in AUM.
This explains why hedge fund investors are usually interested in assets in a particular fund as much as in the total assets managed by the fund manager in question.
Of course, my plan is to offer two products going forward: - my current aggressive fund with $3mm AUM, - an institutional targeted program with $10mm AUM, emphasizing low m/e, low vol, (hopefully) low draw-down, but still an excellent Sharpe with zero correlation. The new managed account would be in this category. This is just a plan of course. We will see what happens after it meets the enemy.
So I presume the second product will be soley via a managed account in order to use notional funding to get the higher AUM. Correct?