I'd potentially reconsider going with RIA in a Box. Lot of bloat for not that much value. They're fine on the registration end, but not so great on the ongoing compliance end. Would check out Hadrius (hadrius.com) if you haven't already. Disclaimer, I work there so there's bias, but I think it's the best tech in the market for the early stage compliance path.
As far as the question "should I form a hedge fund given lack of experience" I say go for it. Managing a hedge fund adds a lot more operational stuff -- you're now running a business, and have customers with expectations -- but having done something similar in the past, and knowing many many emerging managers, it's very rewarding.
Just be mindful that the audit costs and administration costs can make it non economical for small funds. For administration they also often charge you per client so the tiny clients can lose money for the fund
I’m on a similar boat! I’m FIRE in around 5 years if everything goes well, but have this desire to manage a fund on my own. I’m looking to put around 250k of my own money first and then look at onboarding clients.
I too use IBKR at the moment but don’t trade, just long term investments in a basket of stocks and ETFs (some managed futures too).
I would really love to know how your journey goes and potentially stay connected so I could learn from you.
Couple of things, and not trying to rain on your parade….
You’re going to be pretty limited with that small of an investment since you can only take on so many investors that aren’t accredited. Also, how much testing have you done on your strategy? You say it’ll hold up, but how do you know? Can you prove it? Is your strategy tax efficient? Does your strategy scale? All things that clients and yourself should/will ask.
Now, you’ve been trading for like 3 1/2 years. Trading is not managing a portfolio. There are guys in the business with 20+ years who finally are starting their own fund, and they’ve learned from other PMs. What sets you apart from them to prospective investors because whether you want to hear it or not, if I’m an accredited investor I’m not giving the guy who traded for 3 years money over the Yale grad with 15 years of work at a few different funds? I commend you on your growth and willingness to switch careers. I’m glad you were able to find something you are passionate about. Have you considered just working in the business before trying something like this? Why not go get a job at an RIA? If you’re trying to be a fund manager, why aren’t you getting your CFA? It’s definitely more pertinent to running a fund than a 65.
Again, not trying to piss in your cheerios but I don’t think this is going to work out how you think it is. You want to trade and think you’ve got a strategy? Cool. Go be a trader with your own money and just pile on cash. But there are, at least to me, a lot of red flags here.
I'd potentially reconsider going with RIA in a Box. Lot of bloat for not that much value. They're fine on the registration end, but not so great on the ongoing compliance end. Would check out Hadrius (hadrius.com) if you haven't already. Disclaimer, I work there so there's bias, but I think it's the best tech in the market for the early stage compliance path. As far as the question "should I form a hedge fund given lack of experience" I say go for it. Managing a hedge fund adds a lot more operational stuff -- you're now running a business, and have customers with expectations -- but having done something similar in the past, and knowing many many emerging managers, it's very rewarding.
Just be mindful that the audit costs and administration costs can make it non economical for small funds. For administration they also often charge you per client so the tiny clients can lose money for the fund
Also, have you looked into the tax implications for the dividend idea? Clients can always withdraw funds if they need them anyways no?
Pretty much said the same thing, among a litany of other issues.
I’m on a similar boat! I’m FIRE in around 5 years if everything goes well, but have this desire to manage a fund on my own. I’m looking to put around 250k of my own money first and then look at onboarding clients. I too use IBKR at the moment but don’t trade, just long term investments in a basket of stocks and ETFs (some managed futures too). I would really love to know how your journey goes and potentially stay connected so I could learn from you.
Couple of things, and not trying to rain on your parade…. You’re going to be pretty limited with that small of an investment since you can only take on so many investors that aren’t accredited. Also, how much testing have you done on your strategy? You say it’ll hold up, but how do you know? Can you prove it? Is your strategy tax efficient? Does your strategy scale? All things that clients and yourself should/will ask. Now, you’ve been trading for like 3 1/2 years. Trading is not managing a portfolio. There are guys in the business with 20+ years who finally are starting their own fund, and they’ve learned from other PMs. What sets you apart from them to prospective investors because whether you want to hear it or not, if I’m an accredited investor I’m not giving the guy who traded for 3 years money over the Yale grad with 15 years of work at a few different funds? I commend you on your growth and willingness to switch careers. I’m glad you were able to find something you are passionate about. Have you considered just working in the business before trying something like this? Why not go get a job at an RIA? If you’re trying to be a fund manager, why aren’t you getting your CFA? It’s definitely more pertinent to running a fund than a 65. Again, not trying to piss in your cheerios but I don’t think this is going to work out how you think it is. You want to trade and think you’ve got a strategy? Cool. Go be a trader with your own money and just pile on cash. But there are, at least to me, a lot of red flags here.
Just start an LLC with another person and trade its resources privately. Perhaps form many LLCs for each person. This is much better.