How do I open a hedge fund?

I run a financial newsletter and our advice is rather profitable. I'd like to make the switch from providing advice to managing money by opening a hedge fund.

If you have a verifiable track record that can also be backtested, you should have no problem pulling in money. The capital problem occurs when you have an "idea" but no historicals.

It is relatively easy vs opening your own b/d or something. If you have a track record, i say go for it.

A Hedge Fund is just a collective investment scheme that invests using a number of more "risky" financial instruments that a mutual fund will not generally use. It is also characterised by high net worth clients and a fee schedule that tends towards charging relatively higher fees as a percentage of performance.

So go find a lawyer to draw up a contract and then go see if you can find enought clients to put in money. You will have to register with the Regulator, but it really isn't more complicated than that.

First get together enough capital to satisfy regulatory requirements. Then come back for more advice...

There are no capital requirements for a hedge fund, the SEC has put rules in place about reporting and hedge fund managers having background checks and disclosure of previous financial crimes, etc.

There are companies that facilitate hedge fund inceptions. Most are on the net. You can create the partnership yourself, then get the boilerplate language for the contractual obligations personalized by a securities lawyer. After that you will be out there raising capital to make your trades.

Make sure your clearing house/broker is equipped for and sensitive to the needs of a fund or fund of funds, too. They can make a break a good trade.

Best of luck.

P.S. the software suits for sale that are fund specific are expensive but worth every penny.

If your advice is profitable you should have been turning away money for years. Raise the capital and invest it.

First, you've got to find some rich sucker who will let you run his money for him.