By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Start Your Business Magazine
  • Topics

    Grow, expand and leverage your business..

    Grow your start up business with our experts and industry insiders…

    Get Started

    Quick Links

    • Finance
    • Marketing
    • Technology
    • Business Books
    • Wellness
    • Interviews
    • Franchise

    Our Newsletters

    Our website stores cookies on your computer. They allow us to remember you and help personalise your experience with our site..

    Read our privacy policy for more information.
  • Trending
    TrendingShow More
    Communicate Better
    Start Your Business Start Your Business
    Majority of UK Employees Looking for a New Job
    Start Your Business Start Your Business
  • How To
    How ToShow More
    How To Start A Maintenance Business In 8 Easy Steps
    Start Your Business Start Your Business
    Tips for Running a Restaurant in the Most Efficient Way Possible
    Start Your Business Start Your Business
    Becoming self employed…
    Start Your Business Start Your Business
    Vet Start up
    Start Your Business Start Your Business
    Builder’s Growth
    Start Your Business Start Your Business
  • Agenda
    AgendaShow More
    The Positive Impact Of Bringing Nature Into The Office
    Start Your Business Start Your Business
    The Beauty and Versatility of Timber: A Guide to Using Wood in Construction and Design
    Start Your Business Start Your Business
    Could On-site Safety Hold Back Growth of the Construction Industry?
    Start Your Business Start Your Business
    5 Strategies To Attract More Customers To Your Restaurant
    Start Your Business Start Your Business
    4 Vital Safety Precautions to Take During Office Renovations
    Start Your Business Start Your Business
Reading: Hedge Funds:
Connect
Start Your Business MagazineStart Your Business Magazine
Aa
  • Contact
  • Blog
Search
  • Agenda
  • Blog
  • Finance
  • Growing
  • Marketing
  • Opportunity
  • Starting Up
  • Technology
  • Wellbeing
  • Contact
Have an existing account? Sign In
Follow US
  • RSS
  • Terms And Conditions
  • Privacy Policy
  • Contact
  • Licensing
Copyright © 2014-2023 Ruby Theme Ltd. All Rights Reserved.

Hedge Funds:

Start Your Business
Opportunity
Share
4 Min Read

Should You Start One?

If you think that hedge funds are just for billionaires and their offshore accounts, think again. It turns out that these legal financial structures are a wonderful way for you to personally start a business and make large profits. 

Contents
Should You Start One?Yes, If You Have A Unique IdeaYes, If You Make The Legal ArrangementsYes, If You Have A Compelling Fee Structure

A hedge fund is essentially an exclusive mutual fund. However, unlike traditional stock investing, the owners have a “system” or a “mechanism” that they use to grow money faster than the rest of the market. 

The goal of the hedge fund manager is to give clients market-beating returns. That’s what makes it worthwhile investing in the hedge fund instead of just buying an index ETF. 

So, should you start a hedge fund? Let’s find out. 

Yes, If You Have A Unique Idea

Just copying another hedge fund’s strategy to generate wealth for clients doesn’t usually work. They’ve usually cornered the market and honed their method. Any copying will simply whittle away returns and lead to lackluster long-term performance. 

Instead, to make money, you’ll need to have a completely unique idea – something that people haven’t tried before.

There are all sorts of examples of investors doing this throughout history. Their genius is in coming up with a scheme that nobody’s tried before and running with it to get the results that they want. 

George Soros – the man who took on the Bank of England – is famous for his investing strategy called reflexivity. It was a behavioral insight that he had in the 1970s, and it has been serving him well ever since. 

Yes, If You Make The Legal Arrangements

The average investor is not allowed to set up a hedge fund and begin operating. Instead, you need to make the necessary legal arrangements before the authorities will let you go ahead. 

First, conduct an LEI number search. This will introduce you to some of the international standards associated with buying and selling financial securities. If you operate a hedge fund, you’ll need to get comfortable with moving funds in and out of currencies. 

Next, make sure that you conduct the proper registrations with local financial bodies. These will vary according to the country in which you live. You’ll need to submit various forms, for instance, to the SEC if you live in the US> 

Yes, If You Have A Compelling Fee Structure

Relatively few investors will be willing to pay you a flat million dollars a year to invest their money (unless you happen to be really good). Instead, they’ll expect you to employ a fee structure that offers the right incentives. 

The industry standard is a 2 percent management fee and then a 20 percent performance fee. In other words, you take 2 percent of the investor’s funds deposited with you as a fee and then 20 percent of any extra gains that you make on their behalf.

Things are changing, though. Investors are looking for lower management fees, but are often willing to pay more for high performers (because the long-term gains are so extraordinary). 

Also, think about your minimum commitment. Many hedge funds start at $2 million and then go from there.  

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.

By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Start Your Business December 22, 2021
Share this Article
Twitter LinkedIn Reddit Email Copy Link
  • RSS
  • Terms And Conditions
  • Privacy Policy
  • Contact
  • Licensing

Get the latest from us delivered straight to your inbox

Start Your Business Magazine: The Ultimate Business Start Up Guide provides information advice and guidance for entrepreneurs and new business start ups. Get the latest from us delivered directly to your inbox.

Our website stores cookies on your computer. They allow us to remember you and help personalize your experience with our site..

Read our privacy policy for more information.

Copyright 2023 Gambit Interactive Media Limited – All Rights Reserved.

Manage Cookie Consent
We use technologies like cookies to store and/or access device information. Cookies are used for ads personalisation We do this to improve browsing experience as well as show personalized ads. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}
Join Us!

Sign up to our free newsletter and never miss a hot topic!

Zero spam, Unsubscribe at any time.
Go to mobile version
Welcome Back!

Sign in to your account

Lost your password?