Fwd: How to Start a Hedge Fund
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rakesh kherajani
Apr 14, 2016, 10:15:35 AM4/14/16
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From: "Hedge Fund Group (HFG) Association" <te...@wilsonconferences.com>
Date: Apr 14, 2016 10:07 PM
Subject: How to Start a Hedge Fund
To: <rakesh.k...@gmail.com>
Cc:
I have met a lot of talented traders in my career and many of these investors are dissatisfied with the fund they're currently at or feel like they could be more successful if they had their own fund. Forget the earning potential of running your own hedge fund, for these traders and others like them that have decided to hang their own shingle, it's about more than money. It's about running your own business, building something lasting, and proving that you have the mettle to beat the market consistently.
Does that sound familiar? If so, I wanted to share my the best advice I have on starting a hedge fund and a short video to get your wheels spinning.
Top 5 Tips for Starting a Hedge Fund
1. Starting a hedge fund is not a get rich scheme. In 90% of all cases which our firm has witnessed it takes at least 3-5 years before the hedge fund becomes profitable and stable as a business. I’ve worked with a client in the past who had been running a fund for 7 years and still had not raised enough capital to be self-sustaining
2. Complete due diligence on your service providers. A hedge fund was quoted at over $80K for some very simple legal formation costs, which is at least $35k above what most other firms charge for this same service. If a new hedge fund does not shop around they could end up paying twice as much to service providers as they need to. No, hedge fund startups should not select service providers based on price, but they should always sit down or have conference calls at least with three prime brokerage firms, three auditors, and three administration firms before deciding who to work with.
3. Always be growing relationships. This is different than always be selling. Selling can be spotted from five suits away and a networking event, and felt by how someone asks what company you work for and what your role is there. It is always best to take the high road, the long-term approach yet always be looking out for those individuals who you should invest a significant portion of your time getting to know. The benefits of doing so could be valuable advice, leads or an allocation. If you are always looking too close than no professionals along the way will want to give you feedback on your marketing materials or suggest an alternative path to raising assets.
4. Focus on risk management and the investment process more than high performance returns. Yes, investors want to see strong returns but a top five sign of a green hedge fund manager is someone who constantly pushes their extremely high returns found in back-testing or their first 4 months of operating. Doing so ruins much chance of serious consideration as it gives off the impression that your fund will reach for those returns at any cost or risk. Speaking about returns too much takes away from confidence in your fund’s investment process and risk management controls.
5. Invest in yourself. Choose high quality service providers. Build a team. Break down your investment process into concrete steps, and spend 50 hours creating a solid PowerPoint presentation/pitch book for your fund. Don’t show it to a single investor until you have completed 5 drafts of it. Too many times I see hedge fund managers looking to raise capital who have not yet taken the time to organize their own thoughts, plans or marketing materials. If your hedge fund is not worth your own investment of time, why should any invest their time and possibly capital into it? Investors look for signs of a manager having skin in the game in multiple ways.
Bonus Video: http://HedgeFundTraining.com/Start-A-Hedge-Fund
If you're starting your hedge fund or looking to get to the next stage, I'm hosting a private Capital Raising & Investor Relations Workshop here in Miami this month. We only have a few more seats so give Sophia on my team a call at (305) 503-9077 to see if we still have availability or visit http://HedgeFundGroup.org/Capital-Raising
Richard C. Wilson
Founder & CEO
Certified Hedge Fund Professional (CHP)
The Hedge Fund Group
(305) 503-9077
328 Crandon Blvd. Suite 223
Key Biscayne FL 33149
USA
http://HedgeFundGroup.org
To unsubscribe or change subscriber options visit:
http://www.aweber.com/z/r/?bEwszGwstMwcbIxszAxMtEa0zIysrEwcjJw=
From: "Hedge Fund Group (HFG) Association" <te...@wilsonconferences.com>
Date: Apr 14, 2016 10:07 PM
Subject: How to Start a Hedge Fund
To: <rakesh.k...@gmail.com>
Cc:
I have met a lot of talented traders in my career and many of these investors are dissatisfied with the fund they're currently at or feel like they could be more successful if they had their own fund. Forget the earning potential of running your own hedge fund, for these traders and others like them that have decided to hang their own shingle, it's about more than money. It's about running your own business, building something lasting, and proving that you have the mettle to beat the market consistently.
Does that sound familiar? If so, I wanted to share my the best advice I have on starting a hedge fund and a short video to get your wheels spinning.
Top 5 Tips for Starting a Hedge Fund
1. Starting a hedge fund is not a get rich scheme. In 90% of all cases which our firm has witnessed it takes at least 3-5 years before the hedge fund becomes profitable and stable as a business. I’ve worked with a client in the past who had been running a fund for 7 years and still had not raised enough capital to be self-sustaining
2. Complete due diligence on your service providers. A hedge fund was quoted at over $80K for some very simple legal formation costs, which is at least $35k above what most other firms charge for this same service. If a new hedge fund does not shop around they could end up paying twice as much to service providers as they need to. No, hedge fund startups should not select service providers based on price, but they should always sit down or have conference calls at least with three prime brokerage firms, three auditors, and three administration firms before deciding who to work with.
3. Always be growing relationships. This is different than always be selling. Selling can be spotted from five suits away and a networking event, and felt by how someone asks what company you work for and what your role is there. It is always best to take the high road, the long-term approach yet always be looking out for those individuals who you should invest a significant portion of your time getting to know. The benefits of doing so could be valuable advice, leads or an allocation. If you are always looking too close than no professionals along the way will want to give you feedback on your marketing materials or suggest an alternative path to raising assets.
4. Focus on risk management and the investment process more than high performance returns. Yes, investors want to see strong returns but a top five sign of a green hedge fund manager is someone who constantly pushes their extremely high returns found in back-testing or their first 4 months of operating. Doing so ruins much chance of serious consideration as it gives off the impression that your fund will reach for those returns at any cost or risk. Speaking about returns too much takes away from confidence in your fund’s investment process and risk management controls.
5. Invest in yourself. Choose high quality service providers. Build a team. Break down your investment process into concrete steps, and spend 50 hours creating a solid PowerPoint presentation/pitch book for your fund. Don’t show it to a single investor until you have completed 5 drafts of it. Too many times I see hedge fund managers looking to raise capital who have not yet taken the time to organize their own thoughts, plans or marketing materials. If your hedge fund is not worth your own investment of time, why should any invest their time and possibly capital into it? Investors look for signs of a manager having skin in the game in multiple ways.
Bonus Video: http://HedgeFundTraining.com/Start-A-Hedge-Fund
If you're starting your hedge fund or looking to get to the next stage, I'm hosting a private Capital Raising & Investor Relations Workshop here in Miami this month. We only have a few more seats so give Sophia on my team a call at (305) 503-9077 to see if we still have availability or visit http://HedgeFundGroup.org/Capital-Raising
Richard C. Wilson
Founder & CEO
Certified Hedge Fund Professional (CHP)
The Hedge Fund Group
(305) 503-9077
328 Crandon Blvd. Suite 223
Key Biscayne FL 33149
USA
http://HedgeFundGroup.org
To unsubscribe or change subscriber options visit:
http://www.aweber.com/z/r/?bEwszGwstMwcbIxszAxMtEa0zIysrEwcjJw=
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