We find on fintag.com that we too can get into the hedge fund business:
“HEDGE FUNDS FOR MORONS,” begins the article, which is a reposting of the article “A how-to of hedge funds,” from FinancialTimes.com.
“‘Nowadays there are two kinds of people in the financial world – those who want to run a hedge fund, and those who want to invest in one,’ argues Hannah Terhune over at Capital Management Law.
“‘Today, pretty much anyone with $15k or thereabouts can start a hedge fund,’ says Hannah. ‘What money cannot buy is talent, courage and entrepreneurial drive.'”
This $15,000 figure must be an error, fintag comments. You’ll spend that much in a couple of consultations with lawyers. Maybe $150,000 could get you started.
“‘The how-to guide includes advice:
- Key items needed to start a hedge fund (‘money, a lawyer, a prime (or introducing) broker, office space (or a home office), and eventually, an accountant’)
- Time-line (‘The legal process of setting up a hedge fund usually can be completed within 60-90 days’)
- Where best to set up an offshore hedge fund (Cayman Islands or the Bahamas)
- Who can invest in your hedge fund (generally limited to very high new worth individuals or plans with funds in excess of $5 [million])
- ‘Incubator’ hedge funds (A way of testing the waters – ‘setting up an incubator hedge fund allows a hedge fund manager to develop a track record which will assist in attracting investors later in time)'”
Oh, if only we had had this helpful information two years ago. We could have begun a hedge fund based on our Anti-Liquidity Variable Evolutionary Model Portfolio Theory.
Which is to say, we could have taken in $1 billion…made a single call to place the money in gold bullion…and then taken a two-year vacation in the tropics.
Let’s see, first we get 2% of the capital each year…so that’s $20 million each year, or $40 million for the two year period. Plus, we get 20% of the gain. Gold rose about 47%…that’s a profit of $475 million…times 20%…well…that’s a cool $95 million for us. $95 million plus $40 million equals $135 million. See how sweet this hedge fund business is?