We all know that it is possible to manage regular people's money But is it possible to get direct investments from large institutional banks/hedge funds to manage in the same manner?
It's possible but the person that's able to get such types of investments has an existing connection or relationship with those at the large institutional banks/hedge funds prior to negotiating for such types of investments. Mark
I'm sorry but this is plain false. Any properly setup entity can pitch to large institutions such as pension funds, FoFs, Asset Management, insurance funds and large banks. You do not need to have a connection, you simply have to fit the requirements and fit the bill. Often, you may need to know who to contact. If you do not fall under FINRA regs, as well as the institution's own criteria, no amount of "connection" will help you. Plenty of these institutions constantly look to change their allocations.
No links, just a matter of knowing and being in the business. FINRA regs you can look up on your own and most institutions such as the ones I mentioned follow that. They have to do with proper reporting requirements, how much an institution can invest in a particular fund, proper support, etc. Bunch of red tape in other words. I don't know what kind of operation you run and really could not lend an opinion without that info. But the bottom line is that you can set up an LLC for minimal costs and get investor moneys. If you want institutional money, it's a whole other world.
If he is a properly setup entity he wouldn't be at an anonymous discussion board looking for answers. Simply, I'm under the impression (my opinion based upon the lack of info) he's a one person shop and I've never heard of a large institution, bank or hedge fund allocating money to a one person shop without that person having prior connection with them even if the individual had the proper regs. If I'm wrong...please provide reference. Mark
WrbTrader, You are correct - I am a 1-person shop. I was told that there is a potential European bank that wants to give me some small money to manage - based on my trading experience and strategy I gave some details on. I'm not sure the amount is large - maybe 1MM or 2MM....... I won't be meeting with the guy until later this year - since he is based in London and besides, he wants to see my performance for the remainder of this year To my knowledge, setting up a hedge fund or legal entity to handle trading investments is expensive and I was hoping to be able to manage 1/2 investment sources without going thru all the hurdles Any advice?!
If you fit the FINRA regs and the requirements of the institution, they can allocate to you if they choose to. A one person shop is quite unlikely to fit those requirements but it is possible. I really do not understand what you mean by "prior connection". Maybe you mean an ex-partner and employee of the institution who started his own operation. They might be able to bypass some of the institutions less significant requirements but they won't bend FINRA regs. And you will still need to reconcile any conceived conflicts of interest and have a proper prime broker, legal counsel, auditor and administrator. Also, most will check your back-office capability, internal risk control and IT.
Would it be a managed account or an actual investment? Plenty of institutions will do a managed account, but if might be against your interest to do so as they are just fishing for edges & strategies they can copy.