How do you start your own hedge fund? You have wealthy parents and friends who will give you a lot of money to start.  Even Buffett raised assets from family and friends of his father - a Congressman. The alternative is to work at a tiger cub fund, become highly successful to the point where you can live off your money and/or can raise assets off your track record

In general it doesn't make sense to start a fund unless you are already "made" (ie. de-risked) b/c with a small asset base you can make more money working for someone else (an investment fund)

 

How much experience does this person have? I personally wouldn’t invest with friends or family without some experience and a real strategy that I understand. 

I’ve had a few friends/colleagues start funds but that was after many years working at top funds (most successful one runs about $1bln). Those that tried early on usually failed (and needed family money, no way you can raise from investors without experience). 

 
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I know like 6 people who have started their own funds. They worked at successful funds and then went off on their own early-mid 30s to try their hand. At peak they were managing between 50 and 300 million. Only one of them is still running, and that's the newest one (<3 yrs old). It's a tough biz, even if your ideas are good you can get screwed with bad luck in the market or a client pulling money at an inopportune time.

 

do all the people you know who did it do so with family money?

 

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