Starting a quant hedge fund
I am launching a 2-person quant hedge fund in crypto. We're currently trading with prop funds and will soon get external investors. Very interested in any advice about fundraising, legal setup, networking or anything else related to start a small hedge fund.
Thanks!
how much you starting with? what's the estimated cost of running one currently?
Same situation. Setting up my quant shop as well. We put it offshore in Cayman. On specific legal setup, better find a lawyer.
With fund raising, just utilise my network, and partners' network. If you're an industry veteran, then fairly easy to pull some money from HNWs & small/mid-size Family Office (carve them out from your past places). Otherwise just go for family & friends first, you can consider hiring a marketer/sales person to do Linkedin/Sales Navigator to find prospects and set up calls but this in-house practice is not very effective. There are a number of capital matchmaking platforms for boutique/startup funds you can sign up to, the key is try to get this outsourced at a reasonably cheap price so you can focus on investing/trading.
Can't pull institutions as LPs at this stage, but hopefully in near future, which will be outsourced to Placement Agents (ideally from BB Prime desks' Capital Introduction if we contract one of the BB as our broker). Otherwise will just opt for tier-2, tier-3 placement agents.
Interesting, great timing.
I'm thinking of setting up a Long/Short US Equities fund next year, focusing on Technology, FinTech and Retail. It's very tempting as everything is extremely cheap. I suspect that you will be positioned for absolutely explosive returns coming out of this (whenever that may be), as will I.
Best of luck to all.
God I love these threads, they always seem to ask about legal requirements as well. Would love if we could check back on the outcomes of everyone who posted a similar question. My advice is not to seek advice on WSO. Next advice is that fundraising for crypto-black boxes is difficult.
Yeah. I always figured anybody with enough skill to open a hedge fund really ought to already have enough knowlege and/or contacts with senior people that they don't need to ask WallStreetOasis for advice on how to do legal setup and fundraising. If you don't already know a professional who can advise you on those two basic first steps, then...well, I'm not saying your odds of success are low, but I think you'll be amazed how much time a 2-person hedge fund spends on stuff that isn't related to investing.
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