How To Create And Setup A Hedge Fund: 10 Key Lessons
Posted by Timothy Sykes on Tue 11th of Nov, 2008 09:02:56 AM
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Back when I was promoting my book ‘An American Hedge Fund‘ last last year, I wrote a little article detailing the creation of my hedge fund.
A few days ago, Richard Wilson, the HedgeFundBlogger.com, picked it up and now The Financial Times even has a story on it too (do me a favor and click THIS FT link, I’m the #3 most popular article now, I wanna be #1!)
Richard has the full version of my article, but here’s the top 10 lessons nicely summarized by FT (who also call me “ego-on-legs, I like it, kinda catchy):
Lesson #1: If you consistently beat the market, you will face endless questions about whether or not you are a fraud.
Lesson #2: Everything takes much more time in the real business world compared to the trading world.
Lesson #3: Focus on trading first; never schedule investor meetings during market hours.
Lesson #4: Do not feel bad about changing brokers if they are ripping you and your clients off. They are not girlfriends; there is always somebody cheaper and better out there.
Lesson #5: The larger the ‘nest egg’ stake the manager has, with the initial startup–the better.
Lesson #6: Focus on what works for you and do not change to accommodate others.
Lesson #7: Raising money does not come easily for a startup hedge fund manager.
Lesson #8: With capital introduction, there’s always a catch.
Lesson #9: This industry is full of frauds and con artists.
Lesson #10: Results are much slower in the real world compared to the trading world.
No matter that the hedge fund industry has evolved dramatically, all those bullet points are still pretty much true. Just like JL says, Wall Street never changes.
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