How to start a small investment fund (hedge fund)?

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Old Aug 21, 2016, 12:49pm   #1
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How to start a small investment fund (hedge fund)?

What licence and how much capital at minimum is required for registering an internationally available investment fund (ie. a hedge fund for trading equities and indices, not real estate etc) in the US or EU?

Last edited by marsman; Aug 21, 2016 at 12:53pm. Reason: typo fond vs. fund...
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Old Aug 21, 2016, 12:52pm   #2
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Did you mean hedge fund as opposed to fond ?
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Old Aug 21, 2016, 12:55pm   #3
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Originally Posted by Trader333 View Post
Did you mean hedge fund as opposed to fond ?
Ops, yes, "hedge fund" I mean
(in German it's called "Hedge Fond" :-)

I fixed the typo, I hope so.
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Old Aug 21, 2016, 1:00pm   #4
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marsman started this thread I mean where investors invest into the hedge fund, and the hedge fund tries to make profits by investing and trading these investments.
Ie. it is not about managing/trading individual portfolios of other people.
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Old Aug 21, 2016, 1:22pm   #5
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marsman started this thread Update:
In this german document of the German BaFin (the FinTech watchdog in Germany, ie. the "German SEC" I think):
http://www.bafin.de/SharedDocs/Downl...cationFile&v=1
minimum requirements of 25k, 50k, or 125k are mentioned. I'll need to sort out what they mean in detail...

Further links:
http://www.bafin.de/EN/Aufsicht/KVGe...s_node_en.html (english)
http://www.bafin.de/DE/Aufsicht/KVGe...onds_node.html (german)

.

Last edited by marsman; Aug 21, 2016 at 1:37pm.
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Old Aug 21, 2016, 1:41pm   #6
 
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Apparently folks....I am about to be cut off at the knees for having the temerity of offering Traders an additional income stream...c'est la vie, quel damage, et tant pis !!!
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Old Aug 21, 2016, 1:58pm   #7
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marsman started this thread Hi Kevin,
thx, but we already have an IMHO good trader, it's me , and we don't need the services of other companies,
we just want do it all ourselves. And we don't trade any bonds as we aren't specialised on that.
We (me and my trading partner, as unlicensed & unregistered privates yet) just need to form a legal entity for finding more funds, therefore the idea with a hedge fund.
The goal we have is big, we can't/won't wait 5 or more years to reach this goal.
That problem is solvable in a much shorter timeframe only by using more funds...
I can just repeat my by now maybe famous example to illustrate and justify that point of view of ours:
30% of 10k is 3k
30% of 100k is 30k, ...
Ie. as said elsewhere, even in this case size really matters
.

Last edited by marsman; Aug 21, 2016 at 3:14pm.
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Old Aug 21, 2016, 3:31pm   #8
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Quote:
Originally Posted by marsman View Post
. . . I can just repeat my by now maybe famous example to illustrate and justify that point of view of ours:
30% of 10k is 3k
30% of 100k is 30k, ...
Ie. as said elsewhere, even in this case size really matters.
Hi marsman,
Whilst I can't fault your maths, your assumption that the returns increase pro rata in line with the size of the initial investment is incorrect. In other words, the larger your initial pot is then, generally, the smaller the return. It's an inverse relationship so, if you're as good as you think you are, why not start off small and build up equity as quickly as you can? For the sake of argument, if you can turn your £10k (or whatever your starting pot is) into £100k over a 2-3 year period, then you'll have an enviable track record with which to attract investors. Show people what you can do and the applications to your fund will flood in. Establishing a solid track record doesn't require much money: so size really doesn't matter at all.
Tim.
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