Anyone has experience starting a hedge fund?
My partner and I have been investing in public tech equities on behalf of a high net worth individual who's very well connected. Since this is our first time managing other people's money, I turned down investments from referrals we received last year.
We're currently up about 40% YTD. All of the companies in our portfolio are doing really well. We expect our primary pick to continue to be the primary driver of portfolio growth.
Now that we're comfortable with all of the aspects of running a portfolio, we're looking to start a small ($4 - $10 million) formal fund. We believe we have a good strategy to scale up to a much bigger size in the future..
The only issue is, we are only stock pickers (primarily tech), and don't have a hedge fund background. I was wondering if anyone here has experience with starting a long only fund or a hedge fund. Below are some of the questions I have:
How long does it typically take to start a small fund and how much does it cost on average to get everything set up? Do you get a sponsor to seed your fund or do you pay for all of the cost of starting/running the fund from the management fees you collect upfront? If you're charging 2/20, do you charge 1/4 (quarterly) of the 2% management fee upfront when investors subscribe to your fund? I'd love to connect to and hear from people who have gone through this process. Any tips and advice is greatly appreciated!