If you’re interested in starting a hedge fund there are plenty of places online where you can find useful information to guide you through the process.
In this blog we go into detail about what it is you should consider.
The basics of starting a hedge fund.
How unique is your offering?
There are thousands upon thousands of Hedge Funds across the globe. What is so special about yours? This will be one of the deciding factors when investors look at your offering. How good is your strategy? What team do you have in place? What track record do you have?
Can I raise enough money to get the fund going?
Most emerging managers will generally start by using their own money and that of friends and family. The minimum amount should be around the $2m-5m mark.
Costs in general
A big consideration has to be costs. The set up fees can range from anything from $20-100k. Choosing the right solution in your early days is vitally important. At EAM we have a range of low cost, innovative solutions available.
Where should I domicile my fund?
This is a bit of a mine field and really depends on your longer term plan for your fund, how you plan to market it and who you plan on marketing it to. Cayman Islands are still the preferred choice for most Fund Managers.
Choosing the right partners and service providers.
Whether it be finding the right lawyer, fund administrator, or prime broker you must be comfortable with them. You ideally want firms that understand you’re setting up something new and may need some guidance and support initially. It’s in their interest at the end of the day to help you succeed. We offer a turnkey solution with best practice partners.
You must have a strong identity, your website must be sharp and all marketing materials must be well thought out and innovative in design. You will only have one time to impress so make sure you use a firm that understands this market.
Sales and Marketing Plan
There is no such thing as “get rich quick” when it comes to trading your own fund and raising money. Once you have all things in place you are ready to start trading. But then what??
How do you make people aware of your firm? When should you contact people?
You must concentrate on performance first and foremost.
Once your fund is up and running make sure you list it on the FREE Hedge Fund performance websites that are out there; i.e IASG, Barclay Hedge, Opalesque, Eureka Hedge. There are lots of institutional investors that are looking for the “next big thing”. They may not invest straight away but you can be assured of one thing they will be monitoring your firm if you have performed well.
At EAM we can help you with a range of services and solutions that can help you start a Hedge Fund in the most professional way and cost effective way.
For more information about what we can offer please click here to find out more about what we can do.