I hope the OP does not mind that I use his thread for a question about opening a fund. I would like to open a fund in Luxemburg. I have all I need..... except a licence. Seems to be difficult, if not impossible to get this licence. I would like to find someone who can help me with his licence to start up. The fund will only trade my own money so there is no risc about customers who can complain. Who has a licence and can help me? Can be in other country as well, so not limited to Luxemburg. I live in Europe.
Why do I have the feeling I'm the only voice of reason here? Again, there is absolutely nothing sell-able to the public for a fund that claims to make 100% annual returns with low risk. Those guys are a dime a dozen, seriously. If you can find somebody who especially likes going to Vegas, maybe he'll give you some cash to manage. Aside from that, 100% annual returns makes smart people roll their eyes and run for the hills. I know you are a guy who thinks the higher returns the better and 100% sure sounds fantastic, but I'm sorry to say that simply isn't the case. Investors want 10%-20% a year with low risk. So trade your own money, and good luck. But starting a fund? You don't have any meaningful results that will allow you to start a fund. And if starting a fund is truly what you want, you'll need a secondary trading strategy that boasts lower and more stable returns with an expectation that they are sustainable through all market environments. Everybody is a genius in a bull market. Nobody I know would be interested in a fund that claims 100% annualized...
As, I've said, I've put on as big as a 30% position, although in my 10 years or so of managing my account there has only been about 8 or so situations where I've gone this big. If I'm putting on a position that big, I have clear short term catalysts identified, and if they do not materialize they way I anticipate, I quickly cut size.
I think its safe to say I'm generating a ton of alpha. There are a lot of ways to slice and dice the returns. The simplest is to consider that I have had net long exposure of about 50% over the past 3 years, and I've returned around 1200%, versus around 42% for the S&P500. Of course the past three years have been a huge bull market. But it is a positive sign that my monthly returns have had next to no correlation with the monthly returns of the US market. Additionally, in total I have been profitable on my shorts over this period on an absolute basis. Anyway, I'm not trying to pitch my returns here, and as I've said before, out performance of this magnitude is unsustainable.
The sweet spot is around 20%. That is where you will find the most high net worth capital. The market average of 10% is (was during good times) too close to medium grade corp debt returns to attract any serious capital (this may have changed due to low interest rates).
Well, it would be sustainable if your were trading illiquid markets/strategies, but then again you would not be able to scale this into a money management business.
What if the OP has proved return of let say 80%. What's wrong with that? What's the reason it won't attract capital?
If you generate alpha, do not compare to SP. It is irrelevant. Measure such as sharpe ratio is what matters. They bet on the skill.
Smart money can say they can do that in the bull market with a leverage of 2 on russell. No fees/ no other conditions.