Over the last week, the questions about how to get started in hedge funds have come from all over the world, Europe, the United States and even Peru! Most get right to the point and deal with picking service providers and the like. Still, it seems that the tone and nature of the questions indicate an underlying fear of failure.
Just so you can say you have been warned, there is indeed a real and credible threat of failure for people venturing out on their own. Nevertheless, your response should be, “So what!”
You will never know what you are capable of unless you try. If you do fail, you’ll learn some very valuable lessons that otherwise would be lost on you as you continue working for the man! That being said, be prepared for the worst, expect the best and settle for success. It may take a couple of tries, but eventually you’ll get it right. If it doesn’t work out for you, start practicing the following line: “Would you like to see that in a pump or a sling back?”
Think of it this way: Work is work because it is work. Therefore plan on work being tough, plan on it being hard and plan on work having a wacky and wild effect on your life, both inside and outside the office. If you get it right, there is the potential for quite a reward!
Once again, there have been a number of questions about why it is important to use a lawyer who is well known in the hedge fund community, a prime broker who is well known in the hedge fund community and any other service provide, for that matter, who is well known in the hedge fund community. The reason is simple: By doing so, you are relieving yourself of one of the many objections that potential investors are going to give you when you ask them for money. It makes it easier for an investor to say no to a new fund when the manager is using a provider who is not widely known as having experience and expertise in the hedge fund community.
It sounds silly and it probably is but that’s just the way it is.
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