The answer to that question is yes and no. As it is possible for everyone to be a sports star. If you have adequate physical capacity, mental toughness and commitment that can reach the top of his game, and of course, there is an element of luck in everything.
The first thing you should know about hedge funds is what they are. There are many resources on the web to come into chapters and verses, but the simple explanation is that, typically, a hedge fund is set as a company, lets call XYZ Ltd, which is configured in a tax effective competition, such as the Cayman Islands or British Virgin Islands, for example.
The company usually has two classes of shares (which may be more) are a mangement actions (which the company) and the remaining shares investors’ shares (which carry no voting rights).
This company will have several service providers such as:
Prime brokerage: Prime brokers provide a range of personalized services to hedge funds. Current services include the management of trade execution, clearing and settlement, financing and delivery of technology services, risk management and operational support facilities, securities lending, and making introductions to sources of capital.
Fund Management: Some hedge hedge management to conduct internal funds, while others choose to outsource certain functions such as accounting, investment services, risk analysis or performance measurement functions to third-party administrators. Some buyers of services offered by independent pricing of fund portfolio securities.
Custody: hedge fund assets is held by a custodian, including cash in the fund and the actual values. Custodians may also control the flow of capital to cover margin calls.
Of course there will be a fund manager. Assuming that you are seeking to establish the bottom up, that would be you.
All this sounds a bit complicated, but there are plenty of administrative services that could put this set-up together for about $ 70,000.
The development, however, is not the problem. Get money in the fund is.
Say you have a fund set up, and have even succeeded in producing a fund management company license, you are ready to go as a hedge fund manager recently fledged. The problem now is that you have to get money in the fund and this is where problems begin.
Continuous rates of previous managers is payable on an annual basis so that your head is there. Will cover these fees you receive from your fund. The fees are the now famous “2 and 20 ‘which means that there is an annual fee of 2% and 20% of the profits.
Say overheads are £ 100,000 per year, you’ll need at least £ 5 minutes in their annual fund to cover expenses. In anyone’s language, which is a big part of change. To achieve this, we must demonstrate to potential investors that you know what you are doing.
Speaking to investors must be able to show their work and the strategies used. Gain this experience is the key.
Taking the traditional route, either to train with an investment bank or directly with a hedge fund company. Investment banks are looking for someone with a good degree, perhaps in math or physics, you want someone who is strong of mind, a quick learner and someone who has the ability to make business decisions based around structures sometimes complex.
Finding your way directly into hedge funds can be difficult, they are very reserved. By far the tradional route is through working as an operator of an investment bank.
So if you have missed the train to become a child again in an investment house are his dreams of becoming a more Hegde fund operator?
Not quite. The thing about money management is that people are looking for performance. If you can demonstrate a track record of performance then people will want to invest money with you. You clearly have to be able to enjoy the stock market, so they probably have been buying and selling shares, but will have to learn more about other market instruments such as futures, etc.
You can do this by opening an account at a trading house of good reputation and the discharge of its trading system. They will give you business ideas and explanations behind them and they will help you develop your operating system’s portfolio of operations similar to what hedge funds do. If you immerse yourself in this type of operations, making profits in its own portfolio, then you are creating a history. If they are successful enough, you may reach the point where they think they have the ability to start a fund.
We’re not saying it’s easy, certainly not, but not a 20 year old with a first from Oxford does not necessarily limit your potential career as a fund manager. It is much to do and get someone to believe it is credible, but the rewards are there if you get to that stage.
Billionaire boys spent years perfecting their art in most cases and now have the ear of large amounts of money, but do not give up because you can not work in an investment bank .. remember “the money follows the performance.”
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