raising funds

Discussion in 'Classifieds' started by traderwann, Nov 30, 2011.

  1. I hesitate to post this but it is a serious inquiry. A quick search didn't reveal much but perhaps I just didn't use the right terms.

    For the past 30 days I have tested a strategy that is returning approximately 6% - 15% per month, but requires the capital of a HNWI.

    What type of records do I need to present to move this forward?

    Pardon any ignorance in asking this, I am doing so because the marginal benefit of just continuing this pattern without a plan to do something with the results, is quickly diminishing. Without stating the obvious, I also don't know much about this industry.

    Thank you for reading.
     
  2. rmorse

    rmorse ET Sponsor

    The reality is that high net worth investors, fund to funds and family offices that invest big dollars in portfolio managers with interesting ideas will only consider real returns. Sometimes they go a step further and want audited real returns for a longer time period than one year. Your best case moving forward is to get an account funded with your own money or an investor's money, produce some real returns to market up the chain. If you have to, offer that investor a very high payout to build the track record.

    Bob
     
  3. falcon

    falcon

    I have a friend is does auditing for type of thing and says depending on your strategy you need anywhere from 6 months to 3 years track record on a clean account. His auditing company charges tens of thousands for the pleasure.
     
  4. OP - I sent you a PM but all I can say in public is to be very careful that you don't divulge your strategy. If you have something - even if its a great idea but won't make money over the long haul - they will all try to interview you and discuss, etc. to see if they can get you to expose what you are doing.

    Don't trust anyone and whatever you do don't provide prints or P&L blotters with tickers, etc.

    If someone is serious enough to ask you for an audit - if they are paying only accept a Big-4 firm. If they aren't paying then tell them to screw but don't give your P&L to a small audit shop.

    If they offer a small shop go find your own and ask them if that's reputable enough for them - all you are doing is asking an independent 3rd party to verify your P&L bottom line. They don't need to know anything else.

    DO NOT tell people what your strategy is.
     
  5. +1. paulson went ballistic when he was pitching his fund to potential investors and one of them didn't invest and just stole his strategy and did the exact same thing on his own and made money.

    re testing vs real returns, 1)30 days isn't even close to being a reasonable backtesting period and 2) hypothetical returns are useless. not trying to be critical just saying what people what to see.

    re seeking investors, i strongly suggest you research rules re soliciting investors so you don't break them esp on this forum.
     
  6. Thank you all kindly for the input!

    @rmorse - the suggestion to fund an account and produce real returns is exactly the point of the original post here, what is the process for doing this? where do i find this investor and what is required?

    @FrankS - the point of this question is based on understanding the limitations of hypothetical results, specifically after 30 days of hypothetical results i don't see the benefit of continuing in this way for much longer as the benefit of seeing what can be done hypothetically diminishes quickly ... the question is how to move forward to develop a real record

    Thanks again everyone.
     
  7. rmorse

    rmorse ET Sponsor

    You're not giving us a lot to work with here. Where are you located? What asset class does the strategy trade? What do you need to run the strategy? How much capital is required to run the strategy at a minimum?

    Email me your contact information and I'll follow up.

    Bob
     
  8. So the question seems to now be: what options does someone with a good set of simulated results have to secure the initial capital necessary to generate real results, besides friends and family?

    There must be billions and billions of dollars in this world generating just a few percent. Unfortunately no one I know is a HNWI, it seems redundant at best to beg for money from people who only have a little when there's so much out there. There's gotta be a better way.
     
  9. You're not thinking about it straight... To any investor, regardless of how much money they have, what matters isn't the return on capital, but rather the risk-adjusted return. With all due respect, what you're offering isn't attractive at all. Doesn't mean that there isn't anyone out there willing to buy a lottery ticket, so best of luck.
     
  10. Thanks for that point, I agree that investors factor in risk when looking at returns. So I have two questions for you:

    1. What did you base your risk calculation on or how did you determine the risk level in this proposal?

    2. How did you then calculate or conclude this "isn't attractive at all" and equivalent to a lottery ticket?
     
    #10     Dec 4, 2011