Assuming the Fund of Funds are legit, you should see if they can put you in touch with long/short equity hedge funds where you can learn from a mentor and perhaps trade a small book. If they think you're a good potential, they should be able to hook you up with a HF they have good relationships with, or are a large client of.

 

What you didn't know kemosabe, was that his pa was net short!

OP, why are you interviewing with FoFs and corp banking when you go to an 'elite' school and are obviously an investing genius?

Off topic question; but I am starting a L/S penny-stock HF, does anyone have any advice? My current returns are approx 5,000% on an annualized basis

"History doesn't repeat itself, but it does rhyme."
 

because I am a B student, enjoy my college life, and don't want to be some I Banking slave when I don't need the money to be totally honest. Thus I want to pursue a career I am actually interested in, which is is money management. Sorry FoF's are below you. my families investment in Third Point in '96 and and Silver Point(if you know what that is) through a FoF's haven't worked out TOO bad. but enjoy whatever you do.

 

I won't name names of the fund of funds but one of them is one of the largest in the business 4 billion + in AUM the other is around one billion AUM. and yes they have full access to both of my books. I will not post my bigger book as it contains all my positions on it, but all I can say is I only started running it last year and did 37%, I have far more more holding in the bigger book and it is far more conservative in nature. Its kind of funny I interviewed at two prop shops and got rejected at both because I didn't pass the math test.... In response to ThinkMacro we are considering this option, and I see it as a good alternative.

 

Trading on $11k as opposed to $3mm + is like using experience driving a small speed boat in order to learn how to drive an oil tanker. Join a respected institution, gain experience, credibility, and contacts - then pursue your goals of starting your own buyside firm.

"Well, you know, I was a human being before I became a businessman." -- George Soros
 

I don't go to an ivy, think of the sub ivy range of schools, UVA, BC, GTown, etc. Reason probably is that I have a 3.2, did one summer as an IB analyst and hated it, and no Bulge Brackets are like hey what are your investment returns. I have a few offer from decent prop shops.

 

What caused these FoFs to want to invest in you? What did they tell you, and how did they approach you?

I'd take the money and see what you can do. 2% would be $70k/year, which is about what your base would be in banking anyways...you are at a time in your life to take some risk, and it sounds like a great opportunity has dropped into your lap. I'm assuming the FoF did some due diligence on you before making the offer? There must be something about your strategy that they like.

 

Listen kid - during your time on the street you'll learn one valuable lesson. Some learn it the hard way but I'll lay it out here plain and simple for ya. It's all about prestige you want to have a good name on your resume and GS TMT IBD looks a hell of a lot better then some janky $2million fund you found. Be smart.

 
Best Response

You'll also learn that boasting your annualized gain on the street is frowned upon. You sound like a high schooler that ended up in the wrong forum. You went from posting your $11K personal account returns to suddenly running a $500K book? And you brought them up for discussion in that order?

  • First of all, according to your "hard-coded" excel spreadsheet, you made 74% profit in an account that originally had only $6,502 at the beginning of last year. That means you most likely were messing with penny stocks and taking excessive risks to generate a return that exceeded the S&P 500 by some 8-9x. FoF's dont invest in funds like that. I doubt you even have an options account because you hardly qualify as an accredited investor and you have no work experience.
  • Second of all, I know many respectable fund-of-fund managers and they don't invest in ANYTHING new with less than a 3 year track record which you don't have. This isnt monopoly money and nothing is free. By the way, I am referring to legitimate hedge funds for investment, not the personal account of some high school kid.
  • Third of all, if your $500K book only has 37% returns what makes you special? Hardly stellar enough to warrant a FoF manager to grant you a free loan to get your imaginary hedge fund with no track record up and running.
  • Fourth of all, this is the real world, real hedge funds require legal, accounting, tax and auditing compliance which cost money. You're proposed AUM will hardly keep the lights on. And I doubt a FoF manager wants to fund your paperwork and overhead.
  • I'm just going to stop there because your clearly blowing smoke... but in conclusion, I suggest you accept your back-office "BB offer"... assuming its real.
 

Whale of Wall Street listen dick weed you have no clue who I am, my dad probably made more money in a day in his Wall Street hay day than you do in a year or 5 years. I will post my 567,000 account just to shut ur cocky arrogant mouth up. I am sure u r a real "whale of wall street" go spend an afternoon at PTJ's place in Gwich if you want to meet an actual class act. The guy doesn't put people down he actually congratulates them on their success, of which I am sure you have very little of. There is a reason the general public has a negative perception of wall street people and you do a good job encompassing it.

 

Nope was not messig around with Penny Stocks, I don't trade. Buying Intermune at 8$ and holding it till 72$ will do the job, also shorting crude helps as well. You know if you do some research you can actually make a lot of money.

 

I think you should take a bet on yourself. Study relentlessly and be the best investor you possibly can. Reach out to industry professionals, learn from them and build your network. No matter your future performance, raising $4m is impressive. You're ~22 - take a chance to do what you love rather than pad your resume with a boring corporate banking job just because it's at a BB.

The whole idea of "keeping doors open" can be kind of bullshit, because you can only have one job. You don't need to go do BB M&A to have a headhunter pitch you 50 positions. If this doesn't work out for you, you just need one HF manager to give you a job and with that kind of story I'm sure you'll be fine.

 

This makes no sense.

Just so you know, a FoF's LPs would sue them if they invested with you. Why do you think the magic number for HF AUM is $100mm? Because FoFs have a min of $5 to $10mm check sizes and they aren't allowed (by their own statutes) to be more than 10% of 1 fund's assets. So a FoF is going to be 90% of your AUM?

Also, I went through dozens of fundraising meetings in the past 2-3 months. You do not get size commitment until after you've been fully diligenced. This includes:

  1. First meeting / intro (usually 2-5 of these)
  2. Second meeting in your office (I'm assuming you have none, unless you were feeding FoFs frozen pizzas from your mom's basement) and running through your books
  3. Full compliance check with CFO and COO (I'm assuming you have none. For any institution to invest with you prior to compliance check is literally the definition of money laundering and they would be sued to hell and back by their LPs)
  4. Setting up escrow funds and preliminary size commitment discussion / range
  5. Final diligence meeting & checks

There are some additional steps in there that I don't feel like typing.

TLDR you're full of shit.

 
SanityCheck:

This makes no sense.

Just so you know, a FoF's LPs would sue them if they invested with you. Why do you think the magic number for HF AUM is $100mm? Because FoFs have a min of $5 to $10mm check sizes and they aren't allowed (by their own statutes) to be more than 10% of 1 fund's assets. So a FoF is going to be 90% of your AUM?

Also, I went through dozens of fundraising meetings in the past 2-3 months. You do not get size commitment until after you've been fully diligenced. This includes:

1. First meeting / intro (usually 2-5 of these)
2. Second meeting in your office (I'm assuming you have none, unless you were feeding FoFs frozen pizzas from your mom's basement) and running through your books
3. Full compliance check with CFO and COO (I'm assuming you have none. For any institution to invest with you prior to compliance check is literally the definition of money laundering and they would be sued to hell and back by their LPs)
4. Setting up escrow funds and preliminary size commitment discussion / range
5. Final diligence meeting & checks

There are some additional steps in there that I don't feel like typing.

TLDR you're full of shit.

I'm not necessarily in disagreement, but one thing I have seen from some FoF's is that they have a small opportunistic allocation to new managers that is more flexible and doesn't have the same hurdles as other portfolio allocations.

 

This is 100% true, my dad ran a FoF for 5 years after DBL and yes obviously they invest in very well established managers but they are always on the lookout for new managers to develop relationships with. If you get in early and the manager becomes a success (i.e. my dad invested a few hundred grand with Jack Walton(look him up) and David Tepper when they started Appaloosa and had like 17 Million AUM.) They were not established although had worked on trading desks and been highly successful. The point is FoF's are always on the hunt for new talent and willing to make small investments with the hope that one of these managers will make it big and remember them down the road. If you ran a Fof's and only invested with guys who were out there for twenty years and never looked to establish new talent you would be out of business in a generation as you would never be able to get into the premiere funds. The doors are closed, at York Capital Man you need to put up 100$ million dollars in two days or you lose your spot... so better to invest 500 G's in a handful (10) of managers and establish a relationship with the successful ones. if not you are down 5 million and if you are a big fund that is nothing. If you don't cultivate talent you are a fool.

 

@"NYBC02" that dick fuld thing is hilarious I seriously hope that is not actually him. I rarely use this site as I think its mostly just a bunch of people babbling but could you remove your comments with my first name and first letter of my last name on it. i rarely use this site and never post mostly just read it for amusement. Just was asking an honest question as my dad who worked on Wall street and mom have varying opinions on the subject. won't post again as you find too many want to be finance hardos(not saying you are in that category) who are basically fools or want to be's.

 

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