Hedge funds

I've been trading for awhile now and it gets to be stressful going in and out everyday.So i'm looking for a way to just raise assets and manage them on a longer term time horizon.I think it would be a lot less stressful and a lot more lucrative once you have a decent amount of assets under management.

 

15% a year is a joke on 10M-. 15% a year on $100M+ under management is serious respect.

nitro

 

Vinny:
I would think the opposite would be true.
A. You have added pressure of performing for others.
B. Holding multiple positions long term is a FULL time stressful
lifestyle.
C. A well managed Hedge Fund trades aggressively all day every day as well as holding positions.

ebo

 

Hedge Funds are not a vehicle for failed traders who think they can make a quick buck by grabbing the management fees. If it were, believe me, people would be doing it everyday.

A hedge fund is a serious business with some serious responsibilities towards the client. Not only do you have to think about your money, you have to protect their money and that's something that adds tremendous pressure on your trading.
If you can't show consistent returns with consistent low drawdowns, don't even start one, it'll kill you (literally).

take it easy.

 

Well said Swoop!

I will take a few hundred Grand scalping and trading anyday with NOBODY to answer to!

 

Hedge Funds are not a vehicle for failed traders who think they can make a quick buck by grabbing the management fees. If it were, believe me, people would be doing it everyday.

A hedge fund is a serious business with some serious responsibilities towards the client. Not only do you have to think about your money, you have to protect their money and that's something that adds tremendous pressure on your trading.

Swoop,


That is well said. The pressure of running and trading for a hedge fund is tremendous. I traded for a hedge fund(a large one) and for a small trading firm and I did much better trading for a small trading firm. If anyone does want to start a hedge fund and has the capital behind them and 50K minimum starp-up capital, I could help. I'm probably talking to 2% or less of the Elite Trader board.




Gene Weissman
E-Brokerage, LLC
gene@ebrk.com

 

Back to Vinny's initial question, there are several different answers, depending on how the hedge fund is formed. The type that you hear about quite frequently is a Rule 506 filing.

A Rule 506 filing can have up to 99 investors. 35 of those can be non-accredited investors. However, the state that you live in can have a significant impact on the answer as well. Part of the determining factor of what you can do is based on your state's investment advisory rules.

For example, if you live in California, you cannot have a hedge fund unless you register as an investment adviser. And if you do register, you can charge your investors a performance allocation--but only if they meet CA's definition of an accredited investor.

Other states have very different rules.

Other types of hedge funds can have up to 500 investors. It depends on how the fund is registered.

Here's some other data from our free website:

You will probably want a Rule 506 filing under Regulation D of the Securities Act of 1933. A fund created under this filing allows you to accept up to 100 investors (but be careful if you have more than one fund – the investors from both funds get collapsed into one “bucket” used for counting the number of investors in your fund). A Rule 506 filing is unlimited as to the amount you can accept from investors and manage. And, under the National Securities Market Improvement Act (NSMIA) of 1996, your state filings are greatly simplified.

We find that a Rule 506 filing is typically your most effective and scalable choice. It’s effective because there is a level of standardization associated with these filings (which allows your fees to be kept to a minimum) and scalable because with one filing, you can bring enough money under management to make your fund profitable to you. Of course, we can consider other filing options if those best serve your needs.

For a Rule 506 Filing, you must file a Form D with the SEC. This merely informs the SEC that an offering is underway. The SEC performs no review of your documents, and the SEC does not give you any “approval” of your offering documents. There is no fee for filing a Form D.

Hope this helps.

 

Thanks for making the info available wes. That is exactly what we did it has worked well.

Running a hf can be tough but rewarding. It is also, as others have said, a considerable responsibility.

I've found it is increasingly difficult to raise money in this environment and most high net worth individuals are turning to hedge fund of funds to perform the due diligence and capital allocation.

Good trading.

 

If you're not already making huge money consistently on your personal account, why would anyone consider giving you their money to invest for them? I figure if I ever get good enough that I ought to consider starting a hedge fund, I'll have people telling me they want a piece of my action without me even having to ask.

 

Does one really have to be that good to where you have investors beating down your door?

I think it's not so much that you're a market wizard, but that your simply better than most money managers. In other words, your performance is relative to other managers, even if it's supposed to be an absolute return.