Well, to confuse things further, there is no hard threshold on the Sharpe ratio either. It's more of a judgment call - how leveraged are you willing to be with your own cash on this set of strategies? Also, try to think of the infrastructure costs - do you need to be managing 100m to offset the cost of data/hardware/office/IT/blond-secretary or can you do it all on a smaller scale?
Yes, I am getting you. Thanks! I will post my stats in few days or maybe PM you. It should lead to a more concrete discussion then. Cheers!
I would think raising cap. on those returns would be fairly simple, no? Those are some solid numbers, regardless of sharpe and the rest of that nonsense. I think institutional would care more about sharpe.
Yes, solid numbers indeed. And you are already at 1mm. Just start a CTA and list on Autumngold etc. CTA formation costs are less than 15k with first rate lawyer etc. You can get it done for less than 5k if you are a bit thrifty though. I am sure within a year of listing on IASG, Barhedge etc. with these numbers, your AUM would grow 5 fold and you can take it from there.
I only do stocks so CTA is not for me, correct? Also those sites..they also seem to be for CTAs. While there are sites for equity investors, I'm not sure these services are for me. I don't know, I just feel like there's so much garbage on these sites that I don't really want to be affiliated with them..
Dunno. I haven't really tried to raise money but I don't think raising institutional money is likely until you have some sort of organizational infrastructure.
Of course, it sounds like you've had some experience trying to raise capital, so if you can share your situation and the channels you went through, that would be helpful.
My situation is somewhat similar. I do not have that amt. of capital you are using but almost the same returns (all options trading). The issue I am running into is the dollar amount I can allocate now which is significantly less than you. From what I've experienced the accredited guys want you to put up a large amount as well so you have skin in. One thing I did do was manage a few of their accounts (and still am) small amounts, but gaining trust, and once all the legal and personal capital is ready they are in. That was a big thing. They want to know they can trust you. How I was able to reach them? Tough. Fortunately I was in LA in 11' and was able to network quite a bit through friends and really just going off word of mouth. This seems to be the way it works unless you already know people with bankrolls willing to become a partner. As far as institutional. No idea. Didn't even think to take it there yet ( still young and have no significant record). Feel free to DM me
yes if you are stocks only CTA is not for you. Sorry for the confusion. But if you do stocks only, why not go the usual route of a prop stock trading firm. No investor hassles, at least 1:15 leverage on your capital. You will start making at least 5x what you are making now from day 1. Sounds a like a no-brainer deal to me. Where is the confusion here? Why even worry about raising money for next year or two, if you can just go this way and instead of making say 400k for the year make 2m for the year?