Starting an investment business

[Cantabrigian]

Like I said at the outset, this was always bound to be a dull discussion.

Was the Maroon 5 show as wonderfully awkward as I've heard?

 

[NameBack]



Like I said at the outset, this was always bound to be a dull discussion.
Was the Maroon 5 show as wonderfully awkward as I've heard?

I skipped it -- went directly out to the clubs that night instead with some guys from Rothstein and Lazard. I heard they were pretty good, actually, but that the crowd just had no idea who the **** they were or what was going on.

 

[idfnl]

You started this up yet?

 

[NameBack]



You started this up yet?

We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.

 

[idfnl]



We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.

I'll kick in 20. See how you do with it, go from there.

 

[bringusingoodale]

Because I know nothing of this, I am curious, if you strike it rich with this, do these kind of things end up with the creators being recognized (beyond some arcane network of people), or will you just be raking in the money while the big machine of finance rolls on anonymously?

Or is it?

"All I want is money, **** the fame I'm a simple man"

[VIDEO][/VIDEO]

 

[nahneun]



We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.

...Don't you have to be registered with the SEC first to call yourself an active fund?

 

[NameBack]



...Don't you have to be registered with the SEC first to call yourself an active fund?

Only if you manage $100mil or more.

 

[Beckwith]

It seems odd to me that you couldn't start this at a prop shop. Skip the expensive legal fees, hone the craft and play with OPM. Seems like if the strategy was that soild every prop shop would be fighting over you. You could establish this there, get a track record then spin the thing off to your own fund without having to give up anything. Also, every one at those conferences has the deepest pockets in the world, that is until it is actually time to cough up real dough and the alligator arms come out. People at top established funds are facing severe headwinds trying to raise money. Good luck with this, but you should really consider the prop shop route.

 

[deepitm]



It seems odd to me that you couldn't start this at a prop shop. Skip the expensive legal fees, hone the craft and play with OPM. Seems like if the strategy was that soild every prop shop would be fighting over you. You could establish this there, get a track record then spin the thing off to your own fund without having to give up anything. Also, every one at those conferences has the deepest pockets in the world, that is until it is actually time to cough up real dough and the alligator arms come out. People at top established funds are facing severe headwinds trying to raise money. Good luck with this, but you should really consider the prop shop route.

This is what I said. But what do I know? I'm merely a professional trader.

Seriously, they already have the infrastructure / low latency networks that you'll need and many should be able to put you on a 50 / 50 split. And even if they don't give you 50 / 50 (usually the better prop firms give you less of a % because they are dedicating more to resources / developers / infrastructure), you should still beat out the 2 / 20 because the 2 won't be jack and you should get at least 20 from a prop firm if properly negotiated.

 

[NameBack]



This is what I said. But what do I know? I'm merely a professional trader.
Seriously, they already have the infrastructure / low latency networks that you'll need and many should be able to put you on a 50 / 50 split. And even if they don't give you 50 / 50 (usually the better prop firms give you less of a % because they are dedicating more to resources / developers / infrastructure), you should still beat out the 2 / 20 because the 2 won't be jack and you should get at least 20 from a prop firm if properly negotiated.

We're not against this at all -- we're currently talking to a prop shop that I met at SALT. We just don't have a particularly good network of prop shops -- we wouldn't really know where to start. But, yes, it's something that we're pursuing concurrently with seeking investors for the fund.

 

[gopherblue]



We're not against this at all -- we're currently talking to a prop shop that I met at SALT. We just don't have a particularly good network of prop shops -- we wouldn't really know where to start. But, yes, it's something that we're pursuing concurrently with seeking investors for the fund.

I agree with the previous posters on this point. The hardest thing for a new HF is getting seed money and then additional asset-gathering. Getting hit with the high up-front capital costs of setting up a fund makes it even harder. Getting some solid performance numbers under your belt at a prop shop, without having to make a significant capital investment in your infrastructure and counterparty relationships is a good idea. You can then spin out into your own fund, and it is likely the prop shop would happily seed you. Even a best-in-class new hedge fund, backed by one of the most respected global banks in the world, can struggle to raise assets from new investors.

 

[NameBack]

Still searching for anchor investors, but we did raise about $60,000 for startup costs for the fund, which should cover everything and then some. The lawyers have started work on the documents, we're making our final decisions on administrators, accountants, and prime brokerage, and the fund will be ready to take investors' capital on August 1st.

 

[mordecai]

That's very impressive. Mazel Tov.

 

[NameBack]

Thanks morde! We're pretty excited.