Is starting a hedge fund worth it? How are the profit margins/overhead

Bumping, I am also interested

>>1684248
>Is starting a hedge fund worth it?
sure especially if you pull a ponzi it will be worth it to you not for your investors tho.

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>>1684248
its a sales job.
why not just sell yatchs if you want rich ppls money.

then at least once the sale is done you never have to see the customer again.

If you are asking this on 4chan, you are not the person that can run a hedge fund, yet alone be an errand boy for a Junior Analyst. Stick to being a NEET or getting a meme Computer Science degree.

>>1684248
You need to raise a good $50M to be stable, but if you know that more money will be coming in you can probably start at just $1M AUM.

Your profit is entirely based on your performance. Generally, hedge funds will charge 2-20, meaning 2% of investors' money is taken immediately as commission and 20% of the returns. For example, if an investor invests $1M, $20,000 is taken immediately. If the value of that remaining $980,000 were to grow by $200,000, then $40k is taken as commissions also.

Now this commission format may seem to make high return strategies more attractive, but investors are generally looking for steady growth. Individual investors are looking for 5-7% growth, so you need to provide a steady 9% roi for it to be worth while for them.

>>1684248
honestly all of your questions are retarded as fuck
>is it worth it?
implying you're capable to start one to begin with. how many years of track record do you have? what's the definitive alpha in your strategies? if you haven't grown your little brokerage account X (X>=10) times over years already with a respectable sharpe don't even bother looking for outside investors
>overhead cost
that's the question to ask when you have at least middle 8 digit aum, below 8 digit you can only afford interns.
>profit margins
u wot? your only real cost is commission and accounting. even if you have outside money you cannot charge 2/20 to offset your cost since no sane person would agree to do that given how poorly the whole industry is doing. you probably cant charge management fees at all. also you won't have access to prime brokerage either so steer away from more frequent trading since the commissions and slippage alone will absolutely wreck your shit.
>how much aum do you need to be successful?
you need to be successful enough before worrying about aum. plus you need scalable success. most strategies are not scalable at all especial technical analysis.

you don't need to start a hedge fund to make money you just need leverage, any pro shop will get you that. people only want the hedge fund manager name because it sounds cool

>>1684248
>Is it worth it?
I don't know senpai, what are you investing in?

>>1684248
i don't hink you get paid for managing a hedge fund and you actually have to be a shareholder in them if i remember correctly.

>>1686188
2/20 is pretty much a dying scheme if you want to have a HF investing in stocks and other standarized securities (like futures or etfs). Current low costs of trading and maintenance cannot explain this level of costs to the investors.

PE investing in real estate or HF sitting in some heavy otc derivatives on the other hand can try explaining 2/20 scheme, however no sane bank will sign ISDA with you if you're less than 1bn AUM.