Remuneration for Seed Capital Providers

Discussion in 'Professional Trading' started by Ridu, Oct 27, 2008.

  1. Ridu


    Hi, I'm managing Separately Managed Accounts for high net worths / corporate clients and have an associate who has expressed an interest in raising further funds from new investors to invest in my accounts... My question: what is the typical fee compensation structure for seed capital raisers?
    It's my desire to keep my associate motivated in raising further capital, however I wish to retain full ownership and control of my company... Is compensation typically a one off % of funds raised? If so, what would be a reasonable amount to pay, and what would be a normal holding period before payment is released? I'm very interested to learn how others deal with capital introduction fee structures and any other issues that I have may overlooked.
    Many thanks for any replies.
    Best regards
  2. Ridu


    had a search on the forum but couldn't find much discussed about this... can anyone who has any experience with capital allocators please comment on the normal fee / incentive structure? Is a one off % the seed captial sufficient, or do they normally expect longer term renumeration? Any ideas on how best to approach this much appreciated
    many thanks
  3. Arjun1


  4. standard is 20% of what the fund earns. Plus it's paid yearly generally at the end of the calender year after performance is calculated

  5. Arjun1


    I think you misunderstood him. He is asking about how salesmen that raise or introduce capital for him should be compensated.

  6. no, that is exactly what I answered.

    however, i should have made clear standard is 20% of what the fund earns to the person on the capital introduced by that person.

    i thought that was a given, but just in case it isnt


  7. maybe you should scrap up enough cash and join hedgeworld or something
  8. better yet

    cant get any cheaper than its a great source

    shhhh, don't tell anyone!

  9. I have an attrective proposal for capital raisers(SMA investing).
    Can you advise anybody of them?