How to set up a fund? (question for money managers)

Hi,

Maybe some of you can help me. I have been thinking recently about starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way. I know about PAMM accounts, but the brokers that have it dont have the product range that I am looking for or are small and hard to trust. Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable? I would really appreciate insight from people who have ANY experience in that matter.

Thanks

As for a hedge fund you would need a lot of money. So lets not go there. For a small fund the best way is a PAMM. You could start to focus only on the main instruments. You may try fxpig PAMM. They could also help in advertising your PAMM. So it is good there.

Thanks for your reply, anyone with a non-PAMM solution?

Depends on you want it legal or not.
If you want it legal, it depends or where you live, or were you want your structure to be created.
Different regulations apply in US, EU, asiapac, etc

gappo123 posted:
Maybe some of you can help me. I have been thinking recently about starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way. I know about PAMM accounts, but the brokers that have it dont have the product range that I am looking for or are small and hard to trust. Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable? I would really appreciate insight from people who have ANY experience in that matter.

I am still trying to develop a collaboration between traders and investors.
For traders, investors asked them to meet some requirements like maximum drawdown, minimum period of trading record, maybe minimum average monthly return, or something else.

I have tried to described it in https://globalprosperityam.blogspot.com.

What do you think?

jerome38 posted:
Depends on you want it legal or not.
If you want it legal, it depends or where you live, or were you want your structure to be created.
Different regulations apply in US, EU, asiapac, etc

Thanks for your reply Jerome! I live in the EU in Poland, here the regulations are very strict and the costs associated with setting up a fund are tremendous. The structure can be set up anywhere really, in Europe preferably, somewhere where you dont need a million different and expensive licenses. Any ideas? Oh, and yes I want it to be legal.

TakeIt posted:

gappo123 posted:
Maybe some of you can help me. I have been thinking recently about starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way. I know about PAMM accounts, but the brokers that have it dont have the product range that I am looking for or are small and hard to trust. Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable? I would really appreciate insight from people who have ANY experience in that matter.

I am still trying to develop a collaboration between traders and investors.
For traders, investors asked them to meet some requirements like maximum drawdown, minimum period of trading record, maybe minimum average monthly return, or something else.

I have tried to described it in https://globalprosperityam.blogspot.com.

What do you think?

I dont quite get your point. Do you look for traders and investors alike and match them? How does that relate to my problem of setting up a fund? :)

gappo123 posted:
...starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way...

...Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable?...

...the regulations are very strict and the costs associated with setting up a fund are tremendous...

I dont quite get your point. Do you look for traders and investors alike and match them? How does that relate to my problem of setting up a fund? :)

I just try to share some ideas, maybe it suitable for you. But if it's not, it's OK 😄

TakeIt posted:

gappo123 posted:
...starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way...

...Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable?...

...the regulations are very strict and the costs associated with setting up a fund are tremendous...

I dont quite get your point. Do you look for traders and investors alike and match them? How does that relate to my problem of setting up a fund? :)

I just try to share some ideas, maybe it suitable for you. But if it's not, it's OK 😄

Sharing is caring hehe, I read the website and your post but I still dont understand completely what it is that you do. Could you go into a little more detail?

gappo123 posted:
Sharing is caring hehe, I read the website and your post but I still dont understand completely what it is that you do. Could you go into a little more detail?

All of us know that most traders loss their money in trading. Maybe because trading was not easy. But in other side, there are also good traders who are able to trade succesfully.

If two type of this people, traders that loss and win, can collaborate, I think they can help each other.

Base on this thinking, i am now trying to develop something like a hedge fund where this two type of people can work together for the benefit of all of them.

What I do?

For they that still have loss in trading, they were invited to be investors in this collective fund until they achieve a profitable trading and ready to trade by their self.

For they that can trade with profit, we invite them to be our trader, to manage our fund in trading. For the safety of the fund, all traders must meet some strict rules for the benefit of all, investors and also traders itself. So this collaboration can lasting as long as possible.

I think this is a unique structure of mutual collaboration in trading 😄

gappo123 posted:

jerome38 posted:
Depends on you want it legal or not.
If you want it legal, it depends or where you live, or were you want your structure to be created.
Different regulations apply in US, EU, asiapac, etc

Thanks for your reply Jerome! I live in the EU in Poland, here the regulations are very strict and the costs associated with setting up a fund are tremendous. The structure can be set up anywhere really, in Europe preferably, somewhere where you dont need a million different and expensive licenses. Any ideas? Oh, and yes I want it to be legal.

Unfortunately Poland might be one of the cheaper spots in the EU to establish a fund structure. There are other very important questions besides where you live. And so there might be some cheaper solutions..... but..... it alwyays depends.

And it is not only about money, you need to prove certain degree of experience and some other things.

I dont know about the costs, but regulatory wise Poland is as bad as you can get I guess, in terms of setting up a fund. You sound as if you have some experience, so maybe you could throw an estimate at me with how much it costs to get all the paperwork done, and what other cheaper solution do you have in mind? In which jurisdictions does experience matter? I generally have 4 years of experience in the money management business (real work experience, not 'trading my forex account') that I can certify.

Thanks for your insight.

@gappo123 First of all I am not a legal professional specialised on setting up such structures so my insight is definitely limited. As far as I know the set-up cost for a full asset manager license might be around 100k Euros + as far as BaFin, Finma, FCA is concerned. But thats a rough estimate.

It really depends on many things. But it is not only about to get the license but more about the cost to run the structure according to the requirements.

As far as the professional backgorund is concerned, I really do not know. They all have different and sometimes 'strange' requirements. Generally speaking you need a specialized law firm to help you in such a case.

Anyway if you are interested in my opinions or ideas write me a PM. But again I am not offering/selling any services related to this, nor am I giving any recommendations. I am just interested in the process, thats all

I work since 2004 for an hedge fund fully regulated in mifid area.
Before stating and hedge fund you have to find investor.
If you don't have a couple of million € you cannot start a regulated trading firm.
If you have a track record use it to find investor and when you are sure that they will invest in your product, go to one existing hedge fund and ask them to work for them. They will set up an account for you, but as I said, you have to bring at least 2 million €

As you are working for a fully regulated HF you should know that to have an investor is not enough to ensure that you will get the license. If not i would strongly recommend to check with your legal department. It is obvious that somebody needs to pay for the set-up and the structure pays off only above a certain level of AUM , i do not think that this is anything new. I think @gappo123 is able to do this simple math himself.

If he has a track record which could attract investors, he might not need any initiall investors to get a job in a HF/Bank. Investors usually follow as you should know. Never heard about this 2 million Eur hurdle. This is, as many things from your world 'interesting'.
If he needs 2 mil for Your HF... well that might be not that attractive as you have 19 other people all doing marketing, back office an trading at the same time .....not mentioning your interestingly low income and bonus structure.

gappo123 posted:
Hi,

Maybe some of you can help me. I have been thinking recently about starting some kind of a structure where I could manage other people's money, the thing is that I have no idea what is the best way. I know about PAMM accounts, but the brokers that have it dont have the product range that I am looking for or are small and hard to trust. Maybe set up a limited partnership? Maybe some other way? Also what would be the minimum amount of money to make your methods viable? I would really appreciate insight from people who have ANY experience in that matter.

Thanks

Try Gainsy Pamm account

If he has a track record which could attract investors, he might not need any initiall investors to get a job in a HF/Bank. Investors usually follow as you should know. Never heard about this 2 million Eur hurdle. This is, as many things from your world 'interesting'.
If he needs 2 mil for Your HF... well that might be not that attractive as you have 19 other people all doing marketing, back office an trading at the same time .....not mentioning your interestingly low income and bonus structure.

There is no regulated in eu and us fund that can be started with less than 2 million. Off shore funds are different, they can be started even with 200k.
I know many hedge fund and no one will take you at work without investors. Maybe you know other hedge fund that can assume with only a good track record.
For what is my experience, without investors, nobody will take you at work as a trader.
It's like Formula 1. If you are a good driver, but you don't have sponsor, you won't fine any team.

If he needs 2 mil for Your HF... well that might be not that attractive as you have 19 other people all doing marketing, back office an trading at the same time .....not mentioning your interestingly low income and bonus structure.

Maybe you don't know what you are saying.
A sub-fund as one director, a supervisor, nedd to receive due diligence from kpmg or other revisor. All this costs at least 80k $ per year.
So, if you open a sub-fund with 100k you need to make 80% per year and your NAV (performance) will be 0%
How can you think to open with less than 2 millions? In any case, it's the central bank that require a minimum investiment to stay active.
https://finance.yahoo.com/funds/lists/ Here you can find thousand of funds, I can assure that it's not easy to become attractive.
Try to see the capital...

myfirstmillion posted:

If he has a track record which could attract investors, he might not need any initiall investors to get a job in a HF/Bank. Investors usually follow as you should know. Never heard about this 2 million Eur hurdle. This is, as many things from your world 'interesting'.
If he needs 2 mil for Your HF... well that might be not that attractive as you have 19 other people all doing marketing, back office an trading at the same time .....not mentioning your interestingly low income and bonus structure.

There is no regulated in eu and us fund that can be started with less than 2 million. Off shore funds are different, they can be started even with 200k.
I know many hedge fund and no one will take you at work without investors. Maybe you know other hedge fund that can assume with only a good track record.
For what is my experience, without investors, nobody will take you at work as a trader.
It's like Formula 1. If you are a good driver, but you don't have sponsor, you won't fine any team.

sure mate.... thats fine. And you are right it is like formula 1..... and one thing is for sure, if you are chaniging teams in formula 1 you have sponsors....the other one is for sure as well, even the last driver has a track record in F1.
You might be too excited.... you are missing one or two points. just calm down a little.