I have a small but full-blown hedge fund that I started at the end of 2021. The current AUM is around $350K. The PL% since inception is around 0% and the max drawdown is around 10%. The monthly PL% since DEC 2024 have been positive every month. YTD PL% is around 5%. While I am still actively working on new strategies, I am looking for partners who have existing strategies with a sharpe ratio greater than 2. Two of my investors have $10B+ of capital. If we can build a good track record for another 6 months, we should be able to receive more capital. Please only PM me if you have at least 6 months of track record to prove that your strategy actually works.
drawdown is too much for big money as it is right now. 4% DD will get whales, i will not partner with you cause i don't need you. but i will tell you some things that might help you. many guys have models that make big gains but they have larger 20-30% drawdowns. you can still run those systems by monitoring the equity and cut off trading when it dips. so you would have a basket of fair models that will be hitting new equity highs (they will be in their groove) you're not going to find anyone with a good model to partner - you are better off going alone. ~lone wolf brown
Thank you for your advice. That is exactly what I am trying to achieve: find a few partners with existing weekly-correlated strategies whose combined sharpe ratio is higher (hopefully greater than 3).
The problem with this is "could'a would'a should'a", you have a shell of a hedge fund and maybe investors. Traders with great systems make 100% of whatever they make and after a handful of years they making millions. I once thought of starting a hedge fund, but all the work and employing people....you don't have trouble getting OPM when you can beat the Indexes for past 38 years. And except for Jim Simmons' fund, big money comes from long term. The little money fills in on years you waiting for huge money as huge money comes in cycles. @MarkBrown is so correct on drawdown. People often put their money into accounts at new highs of funds and too often that is beginning of drawdown. Not only does one have to plan on profits, have to have a plan to hedge anticipating retracements. Good luck to you.
Thank you for advice. Besides the shell of a hedge fund and existing investors, I actually have a working strategy with a Sharpe Ratio of around 2.2 and its capacity is very large. I have been using this strategy in production since NOV 2024 but I only allocate 20-30% of my capital to this strategy, which is why the YTD PL% is ~5%.
Does it have to be fully systematic strategies ? Because after my remote hedge fund trader position where I had a Sharpe 3 around I quit systematic trading at all. Usually you do not have exceptional Sharpes for longer time. Since then I trade fully discretionary on stocks, options, futures, FX it is much better. Just tell me if you welcome discretionary trading aswell and if you are limited to certain asset classes or not. I have a DBA degree if that helps for marketing. You can write me on my profile too if you are interested. I like the idea to build up something. And I see potential in your draft. Let me know if you are interested.
Cloud setup up a shop consisting of multiple independent PM's. Core book, independent pods. One doesn't want any clueless mofo to fuck up ones returns.
Based on my understanding of the PM model, the PM gets paid minimally if his strategy makes no profit. However, being a partner of a fund is different, which would make it less stressful if some of the other partners' strategies work. In my experience, the edge of a strategy might disappear any time and it can take a long time to find the next one. As a result, having other partners with working strategies would be really help during those non-profitable periods. I have experienced it and it was really stressful. As a result, I am looking for partners with established track records to minimize the risk of having to go through it again.