Wow you just ripped Jack a new one. I've seen this post many times before and each time it gets funnier and funnier. I know you shouldn't feed trolls but I'm throwing you a steak and lobster dinner.
The only reason why he'll get interviews or meetings is because the hedge funds and/or prop shops want to learn about the strategy so they can replicate it. They want nothing to do with a profit split and/or the OP. Most shops interview constantly as part of an ongoing fishing expedition that is normal practice.
Winston, is there any way to keep control and make money from a systematic trading strategy short of trading your own account, or setting up your own investment advisor ?
My experience has been very negative about the prop and hedge fund industry in general. Hedge funds will generally interview anyone, anytime just to hear about their strategies. I went to a few a while back when I was trading ETFs. They specifically asked me about my edge and "how I priced fair value in an ETF". Obviously that was my edge and I refused to answer - and with that the interview was over never to have heard from them again. Track record was not an issue, it was all about learning what I was doing. Also, at a hedge fund 2 & 20 goes to the fund - so don't even expect those payout ratios. You'll make a lot more at a prop shop but the balance is a hedge fund probably won't steal your stuff if its profitable. They are just more cut-throat and will kick you to the curb the second you have a losing streak. Prop firms are generally scumbags in my experience. They generally charge crazy high rates, generally can not be trusted and generally lie about the speed and accuracy of their data and execution. My suggestion would be to trade small and do it on your own until you have enough critical mass to open up a portfolio margin account somewhere like IB or Penson or Wedbush, etc. They will have you by the balls - "why should I give you money and fund a strategy that I don't know and/or understand" "our risk department needs to know/understand this trade so we can properly assess risk and/or hedge" "we don't allow external programmers so why don't you let us help you code it up" I don't know of a good way other than if you have something that works and is profitable just run it small and build capital. There is no one looking out for you but you.
Thanks for the reply. Your experience confirms my own. I have not traded prop, but I have traded in an investment bank, a hedge fund and on my own. In an investment bank, to get ahead, you need to be skilled at politics. You get larger risk allocations and make more money if you are a good courtier (with its assorted butt kissing and backstabbing) than if you are a good trader. If you make money (talking prop here, not ripping customers faces off with ridiculous spreads on a flow desk) it is always because of the firm's capital and infrastructure. To see a good bonus, the firm, department, desk and yourself need to have a stelar year and your boss must like you. As a hedge fund employee, the fund has ownership of any intellectual property, or if you have a good contract, you may get joint ownership. Trading at a hedge fund was great for about 3 years. That is how long it took my boss to figured out how I made money. After that something strange happend. A new (cheaper guy) was hired to create a better strategy. The better strategy was simply frontrunning what I was doing. Now I trade on my own with a portfolio margin account. It is a slow grind and a solitary road, and perhaps not the optimal way to milk the edges I exploit, given that they slowly get arbed away.