I inquired to the SEC about starting up a hede fund some years back... they said something like, "You need to be able to raise about $50 Million to make it economically viable.."
That's different from getting an actual investment into your own operation with lockup agreements. Those with real edges to protect won't do managed accounts because their trades & positions are exposed.
That's about what I was told as well by some buddies I'd rather just manage a few accounts More than enough money to be made charging performance fee and AUM fee == if you know what you're doing
It's my only way into starting AUM trading I have no real Wall Street connections and this will get my foot in the door I don't see how my trades being known dulls my edge? Rather, those with a true edge know that it is not easy to duplicate without divulging the actual TA specifics ADD: if I'm long the Euro from Monday 5PM - it's not as if I'm the only one in the world with that position -- what you said about positions being known and no real edge are not true
You do need to have connections...this applies to most any line of work or business. No one is going to trust you unless they know you or they think they know you. Chances are if he walks off the street, cold calls them and makes his pitch he will end up with squat. Regardless of industry, no one is going to give you anything unless you have "credibility"...no not ET credibility...I mean real credibility.
Here is how it works. You can manage someone's money...anyone's money. You just need to have someone give you cash. I have seen some bloggers out there make claims they are now managing other people's money as a result of their blogs. I have known of people in my local community who went to unregistered/unlicensed informal fund managers. They basically gave their cash to someone they trusted who they thought could trade. As for the guys who do this professionally with institutional money, they usually have worked for someone or a firm in the past. Look up the top ten hedge funds and you will see the principles usually worked their way up through an institution. There are other guys like Trevor Cook who were able to capture 190 million through going on radio shows and good ole fashioned shuck and jive. Trevor also lived on the golf course where he was able to get people's cash. So you can manage money at anytime with or without registeration. You just need someone to give you the cash. As for the legalities, as long as they dont say anything then you wont get in trouble.
Look I am just telling you how it is. Feel free to believe what you want. If you have a true edge, you won't do a managed account. Often, you won't even be able to do a managed account because the strategy is not so simple. If you really want to start managing money and have strong belief in your strategy, you should seek seed capital from friends & family and work up from there. You can do managed accounts as well, but the former way is the better route.
Ok then, since you, a nameless faceless alias, are ET's resident expert on managing other people's money then you go ahead and tell us how it is done. The original question was can you get institutions to give you money to manage. I believe the answer is common sense and you dont have to have any money management experience to figure this one out. That answer being that you can get anyone to give you money, but first you have to know people and those people need to trust you. I highly doubt he could simply walk into the HQ of a large bank, coldcall&pitch and then be given some money to play with especially after the Madoff incident. I believe you need to have a significant and established relationship with the large bank first. Can you tell me where my assertion is baseless and wrong or are you into just throwing out two-bit insults? I believe by throwing out a two-bit insult you simply make yourself look LESS CREDIBLE. Anyone can tell someone else that they do not know what they are talking about, but most cannot give reasons and explain as to why.