Well aside from the comment that all hedge fund blowups were brand name audits, (which is simply untrue, in fact most blow ups were either not audited at all or were audited by no name small firms) i would say you are indeed doing everything in your power to start now. I made my millions trading first and then set up house like a bigger firm I suppose, but if i had the desire to trade others capital when I was starting out there would really not be any other choice over what you are currently doing. The important thing for people to understand is that when you get into this business it is like running a business fulltime and then also trying to trade full time. So if you spend 12hrs a day studying and trading the markets successfully now you will likely be severely impacted by the strain of managing the business. Anyhow, kudos to you for going for it and may the trading gods be on your side!
Well, I may be slightly off on the HF blow up audit comment, but if memory serves me correctly, didn't Lancer of Lancer Funds use some top tier brokers and fund administrators. And I think I do recall Bear Stearns, Deloitte or E & Y being involved in some of the blowups, I believe they were even sued by some of the investors. Anyway this is not the key issue here. We agree that there can be benefit to having these firms, my point of âdisagreementâ is that this should not be seen as an absolute requirement for a start-up. Yes there is a heavy strain, very heavy strain trading/researching and managing the business/engaging in biz development. Youâve outlined the ideal scenario, my point has just been there is always a less ideal (yet responsible and prudent way) of ultimately getting to the ideal. Thanks for the insights and dialogue. May the Trading God be on your side too! Wishing you peace, good health, happiness & prosperity.
Paradox to me is you started with 8k but advise on how to get to 100M-multiB and spend 50-80k to do so. How about those is the middle. 200-300k pooled from 4-5 individuals to get feet wet in IB acct. Step wise to 1-2M from friends and family still under 15 ppl. Then if profitable can make shift to PB, expensive law firm and accounting firm. Worse case make a little money, lose a little money, decide not for me and return funds. Unless idiot and overlev and blow out acct What is best approach for above? Seems like meet expemtion from registering with SEC and CFTC/NFA. Form LP or LLC, will need CPA, software, but that should be it, no? Maybe register LP/LLC with state, depend on state. Since met expemtions, should not even have to take test (Series 65/66/3/7). Am I missing something? Comments much welcome.
Proper structure for track record: THat means you need a fund with IM etc, for the track record to be taken seriously right? So still say US15-20K to set up (legal, printing etc).
Seems to me that the guys who actually are able to get funds to institutionally attractive critical mass are salespeople with years of client contact behind them, not traders. Just my observation. Institutional money seems more tolerent of mediocre performance than HNWI's and if you have 400m under management and even 3 partners it looks sweet before any 20% kicks in (also I gather they don't call every day and ask if "we" were on board some move that is clear to everyone at 4.30).
That's right. and if you do an onshore fund it should even be cheaper. Many statups have used Greentrader to draft their fund dcos, set up the structure. I did not use them, but I have heard wonderful things about them. See their website http://www.greencompany.com/HedgeFunds/index.shtml
email above bounced. What is the absolute shoestring minimum for setting up a fund for having a track record and legal structure as a "fund" for track record purposes. Also what are lowest minimum running fees. I want a pure skeleton. I might even go as far as alterring a standard document to make it fit me (as I would basically be paying someone else to do just that). I don't plan to set up a fund but if it could be done really cheaply it would be good to have the option there. I realise that this probably generates a lot of questions needed to establish that the answer given is right for circumstances, but just need a ballpark figure. I am located in Asia and would be covering Asian markets. US is probably the likely customer base. Primarily cash equities but would need the option to use future options, other asset classes if that doesn't affect market positioning.
Don't trade family or friends' money. It will cause you and the people around you unnecessary emotions in doing business. I recall that your friend wants to "help" you. That makes me skeptical about your trading ability. First, be able to make a living as a trader, solo.