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Starting an investment business

Discussion in 'Business, Careers & Education' started by NameBack, Oct 19, 2011.

  1. wootx

    wootx Senior member

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    What this guy says.

    Also, you're perfectly right that you learn by doing. I was in a similar situation some time ago and I made it through by reading a lot and keeping op to date, and looking up to a couple of senior guys willing to help. You'll be fine in the end.

    Best of luck!
     


  2. NameBack

    NameBack Senior member

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    the other option is to play UPRO instead of SPY, and leverage out the ass, and hope that the damn thing works and turn our meager fund into a large fund very rapidly.
     


  3. NameBack

    NameBack Senior member

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    So I think I may take the MetLife job in order to get my Series 7 and get my feet under me and just keep working on building my own business on a more part-time basis.
     


  4. Bhowie

    Bhowie Senior member

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    :cheers:

    This has been a very cool thread. Thanks for sharing, and congratulations. This is a huge accomplishment.
     


  5. gettoasty

    gettoasty Senior member

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    What about your partner, the statistics dude ?
     


  6. CYstyle

    CYstyle Senior member

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    That might be better in the long run too. If let's say you were given about 10 mil to control with your algo and you live off the profits, after fees like in a prop shop, it'd be hard to stick to your plan if you have a couple non productive days. With a salary you won't have the immense pressure to make $ with your trading and can see it through another year or 2 and use the returns and data for a fund later.

    Good luck! keep us updated
     


  7. NameBack

    NameBack Senior member

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    Well, I'll be sure to clear it with him, but he's currently a university fellow where he's pursuing his PhD (and he lives in the east coast, whereas I'm in LA, as is the job offer), so I think it would just be me. From preliminary discussion, he seems fine with the arrangement. This would also leave him available for any prop-shop offers or other more lucrative deals that might come our way.
     


  8. CYstyle

    CYstyle Senior member

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    You know how you were afraid of a EZ disaster, and I was fully confident there would be none? since I've said that, I am less confident. Over the last few months they've had ample opportunity to shore things up, build up confidence only to fuck it up everytime.
     


  9. NameBack

    NameBack Senior member

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    Pretty much. I don't think there's the political will to take the necessary steps to stem the tide, mainly due to German irrational fear of inflation.
     


  10. mordecai

    mordecai Immoderator

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    Thought you were in DC. Why'd you come to LA?
     


  11. CYstyle

    CYstyle Senior member

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    LA is awesome prob :D
     


  12. NameBack

    NameBack Senior member

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    I was in DC -- I moved back to LA to live at home after I was unemployed and fed up with DC.

    edit: and LA is awesome.
     
    Last edited: Jan 13, 2012


  13. NameBack

    NameBack Senior member

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    Hm, so after doing further research it looks like hedge fund managers don't need Series 7 licenses, rather diminishing some of the MetLife job's appeal.

    The ballsier option is to take the Series 65 and get legally set up as a hedge fund, and then seek out either a seeder fund to back us or some wealthy initial clients. It looks like getting registered as a hedge fund isn't really too much of a legal hurdle -- less than we thought originally. Just a few more steps than getting set up as an RIA, really.

    Back to mulling.
     
    Last edited: Jan 14, 2012


  14. NameBack

    NameBack Senior member

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    So I can't tell if I need to get my series 65 or not -- apparently this depends upon Dodd-Frank.

    At one point, many hedge fund managers could remain unregistered with the SEC or states, but now apparently most (all?) fund managers must be registered investment advisors. The thing that's unclear to me is that if you have only accredited clients and have less than $25 AUM, do you still have to register?

    I plan on getting my Series 65 regardless, because we would prefer to be registered as it seems to protect you from some measure of liability, but if a few current leads pan out we may want to be able to take money from accredited investors and start trading and charging fees before I could feasibly get licensed and registered. Anyone have any insight into this?

    Also, probably a moot point, as it assumes these leads will pan out, but I do want to be prepared. Have another meeting on Tuesday, this time with an individual investor. We'll see how that goes.

    Edit: presumably I'll have this question answered tomorrow when law offices will be open.

    Edit2: We're long for tomorrow. Currently on a 12-position streak and up 13.8% in the seven weeks since we began live testing.
     
    Last edited: Jan 16, 2012


  15. NameBack

    NameBack Senior member

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    streak is now at 14, total yield at 15.3%

    Things are starting to get rough though, business-wise. It's gonna take at least 20,000 to get legally organized as a hedge fund, and then we have to hire independent administrators, compliance consultants, and accountants.

    We've been talking to a bunch of Fund of Funds and Seeder Funds and while I do think it's possible for us to go that route at some point, having no infrastructure is a definite mark against us as far as these places are concerned. So now we have to do another round of small/mid dollar fundraising to secure our start-up costs, so that we can raise large-dollar investors for actual AUM.

    Starting a business is hard! In retrospect I was definitely a bit naive about how easy this would be, due to the positive feedback we were getting and the big game a lot of people were talking who all ended up flaking out. Still, I think we're capable of it and that we want to go the start-up route. We're gonna keep slogging through until we get all our legal and organizational ducks in a row, and then hopefully we'll get that crucial anchor investor!

    I'm just realizing that this is going to be slower and harder than I thought. I feel a little stupid and gullible in retrospect, but we're as determined as ever to make this happen. Hopefully someday in the not-too-distant future all you high net worth SFers will be able to invest with Acale Capital Management's flagship hedge fund.
     


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