hedge fund managers

I was just curious about hedge fund managers.

For example, if John works as a hedge fund manager for Goldman Sachs and they charge a 2% management fee and a 20% performance fee.

Does Goldman Sachs get the 2% and John get the 20%?

I thought both GS and John will split the 20% and 2% among themselves ?

In the book Pit Bull, Martin Schwartz was offered 6% and 20% by the Elders Futures Inc.

So, if Martin Schwartz gets 6% and 20%, how does Elders Futures Inc. make money?

"Industry standard" like agreement is not always the case when it comes to real life. In 2002-2003 I was managing a small hedge fund with the initial capital of just $8 million. The agreement that we had signed initially was very unusual and I was almost shoked when they offered me that deal. In accordance to this document I was not supposed to charge any management fee at all, but the incentives were placed on a progressive scale depending on monthly performance. For the first 5% of profit a month I have not been entitled for any commission at all. For whatever was above 5% and up to 8% a month I was receiving 35% of profit; from 8% to 12% - 50%; and for anything above 12% I was entitled for 80% of profit. Eventually after six month of trading we reconsidered the agreement and made it more or less close to the industry standard, because they began to think that they are paying me too much. During that first six-month period there was only one month with my performance below those 5% (no pay month) but there were also 3 months with performance above 12% including one with a trading profit of over 40%.

I have been managing 5 hedge funds ( 2 on equities and 3 on derivatives)
Usually the 2% are for the hedge fund management company to pay charges such as rental bloomberg electricity bills.....auditors external manager calculating NAV ...) salaries ...and never for the trader.
As soon as the 2% covers the fixed charges you can negociate to get a part of it.


Then you have to negociate a fixed salary ( depending on the country and usages)and a performance fees.

I have also do managed account on forex and that is where you win the most because you can charge pips on each operations or better work with ECN broker with Curenex for exemple and add a small commissions on each milion traded. ( cents add to cents..)

Thanks for the replies.

40% per month as a hedge fund manager wow. How much were you risking per trade?

how do i become a hedge fund manager?

if john works for GS, he is not really a hedgefund manager. he would be considered a "fund manager" for GS. a hedgefund manager usually refers to the person who owns/runs a firm that trades a big pool of money, although these days "hedgefund" is a bit of a misnomer.

the "2% management fee and a 20% performance fee" you are referring to... a "2 and 20" or "2/20" is a common way to refer to the fee setup for a hedgefund. the first number refers to the annual fee, off the top. and the second number refers to the profit % the manager gets.

so if you are investing 1mil with a hedgefund, and they have a 2/20 fee structure, that means you pay $20,000 per year as a management fee, and your you give 20% of the annual profits to the hedgefund as a performance fee.

hope this helps

Thanks for the replies.

My risk is the same all the time every time. In average it's about 1% and never more than 1,5% a trade. Normal leverage is 1:2 for the intial trade and sometimes goes up to 1:5 when a position is added to the one with floating profit.

I have been trading 8 small Fx accounts (with 5 figures each) since Oct. 2006 with the recent weeks result below, I believe I can handle a few more accounts and don't know how to approach it so I have posted my intention in other forum (please see pasted post below), I was thinking it might help me to acheive my trading capital target then I will only trade for the existing clients and for my own accounts only,

Any suggestions or pointers will be appreciated!


Regards,

B.N

PS. I am not good in web design/layouts or even typing ,so please forgive my messy layout, (but all the numbers are genuine and can be verifiable thru' my brokers)










My post in other forum: Any Comments?



"Managed Account

I have been trading 8 live Managed Accounts with GFT, IBFX and 1 world since around Oct., 2006

Because of what has happened on Feb 27th, all of them have a draw down of from 35% to 61% (Except one which was break-even)

As of today ( few minutes ago,) 4/3/2007, the trading results were

#1 (#23) Down 4.8%
#2 (#07) Up 73.2%
#3 (#63)Up 0.97%
#4(#33) down 0.25%
#5(#64) Up 50.7%
#6 (#83) Up 16.02%
#7 (# 55) Still Down 13.3%
#8 (#81) Not in trade on Feb 27th, any way Up 0.16%

The Significant part is All the the above accounts (Except account #8)had draw downs of 35% to 61 % on Feb. 27th, and now most of them are
BACK to profits,

These accounts were opened not long ago using "Hedging" and, believe it or not , "conservative" strategies, need outside funds for now until " target trading fund" reached

All results are verifiable and you will have my permission to contact my brokers to check (Except the methodology and transaction details)upon your proof of fund of at least $500,000 (or $200,000 with higher incentive fees) to be equally split into two of my 3 preferred brokers of your choice, PM if your are interested, of course.

I'll have Power Of Attorney to trade clients' accounts ONLY without any access to the funds (except the monthly/quarterly preauthorized fee deductions on a high water mark basis) ,and my Clients are the ONLY ones who have access and control of the funds AT ALL TIME.

Will NOT entertain PMs unless proof of funds are provided. Sorry!

Will try to update the trading results on a weekly basis.





Managed Account Result Summary:

Total Returns as of 5/18/07

Account

#1-----25.7%
#2----116.5%
#3-----43.8%
#4-----28.9%
#5------7.8%
#6------9.8%
#7-----15.8%
#8-----29.4%

Note: The returns of ALL accounts should have been similiar since I have used the same/similiar methodologies, they were not because differnt accounts started trading at different time, but they were all started trading after Oct. 2006 or later.






Average Account Gain/Loss for the week ending in

4/14 --- 13.2%
4/21 ---- 3.8%
4/27 ---- 1.0%
5/04 ---- 4.4%
5/11 ---- 1.6%
5/18 ---- 9.6%
5/25 ---- Coming!






Details:

Managed Accounts

PW=Profit Withdrawal of individual Account (then trading P/L start from 0% again)
CPW (Cumulative Profit Withdraw of individual account in %)=Total Cumulative Profit Withdraw of individual Accounts)
TPW (Total Profit Withdrawal of ALL accounts)=Total of ALL CPW
APW (Averge Profit Withdrawal per account in %)=TPW/8
TPL (Total Profit/Loss %)=TPW+(Total profit/Loss of ALL Accounts in %)
Av PL(Averge Profit/Loss %)= TPL/8 in %
NW P/L (Net Weekly Profit/Loss of the Week)= Difference P/L between current and previous week in %
T=Total
A=Averge


Act ---#1----- #2 ----- #3 ----- #4 ----- #5 ----- #6----- #7 --- #8-----TPL---- Av PL

4/6 *(-5.5%) 69.2% * 3.1% *( -1.8%) 54.5%* 17.2% (-14.2%)1.8%*124.3%*15.5%

4/14**7.6% *86.3%*18.6%**10.5%**69.6%*25.6%*(-1.3%)13.2%*230.1%*28.8%
NWP/L*13.1% 17.1%**15.5%*12.3%**15.1%**8.4%**12.9% 11.4%T105.8%A13.2%

4/21*12.2% *91.6%*23.3%**14.3%**73.7%**26.6%*2.2%*16.9%260.8% *32.6%
NWP/L PL*4.6%*5.3%***4.7%***3.8%**4.1%**1.0%**3.5%**3.7% T30.7%*A3.8%

4/27*10.4%**91.3%*29.9%**13.6%**80.7%**26.1%*0.95%*1 5.9%268.8%*33.6%
NWP/L*(1.8%)*(0.3%)**6.6%**(0.7%)**7.0%*(0.5%)*(1.3%)* (1.0%)T8.0%A1.0%

5/1* PW** 0%**0%***0%****0%***83.3%***TPW=83.3% APW=10.4%

5/4**15.8%*100.7%*35.5%**17.8%*(0.3%)**30.5%**4.3%*1 9.0%306.6%*38.3%
NWP/L*5.4%**9.4%***5.6%***4.2%*(0.3%)***4.4%**3.3%*3.1 %*T35.1%A4.4%

5/11*16.6%*103.0%*33.1%**20.0%**0.1%**34.8%**7.0%*21 .3%*318.9%*39.9%
NWP/L*0.8%**2.3%**(2.4%)***2.2%***0.4%**4.3%**2.7%**2. 3%T12.6%A1.6%

5/16 PW**********************************38.5%********* *

5/18 CPW**************************83.3%**38.5%*TPW=121. 8%*APW=15.2%
5/18*25.7%**116.5%*43.8%**28.9%**7.8%**9.8%*15.8%*29 .4%*389.7%*48.7%
NWP/L*9.1%***13.5%**10.7%**8.9%**7.7%**9.8%**8.8%**8.1 %*T76.6%A9.6%

5/25 Coming!








Note:Managed Accounts Initial Trading Balances may be different due to constant position re-allocations/profit-takings/strategy-changes .


**Will pay Clients (Insitutions Preferred) Managed Account Referral Fees of 5% for 12 months.


Disclaimer: Forex Trading involves GREAT RISKS and past result is not indicative of future performances!

"No fancy websites! No fancy layouts! Just Results!"


B N
Chief Strategist



PS, Sorry for the messy/confusing layout, I am not good at layout, typing or even wordings,. If you are looking for a "good looking" site/layout, please go look at somewhere else, I am sure there are plenty out there, I ONLY try to focus on delivering good results! Thanks!"

Update!

Math. Mistakes made on "Total Returns as of 5/18/07", I forgot to add back the CPW (Cummulative Profits Withdrawal) taken to Account #5 of 83.3% and #6 of 38.5% to reflect the accurate "Total Returns as of 5/18/07",

The Corrected % # should be

#5 ----91.1%
#6 ----47.3


Sorry!

Note: The total returns of ALL accounts should have been similiar since I have used the same/similiar methodologies, they were not because different accounts started trading at different time and/or with different currency pairs, but they were all started trading after Oct. 2006 or later.
.

I have been trading 8 live Managed Accounts with GFT, IBFX and 1 world since around Oct., 2006

Because of what has happened on Feb 27th(which happens once or twice for a long long while), all of them have a draw down of from 35% to 61% (Except one which was break-even)

As of today ( few minutes ago,) 4/3/2007, the trading results were

#1 (#23) Down 4.8%
#2 (#07) Up 73.2%
#3 (#63)Up 0.97%
#4(#33) down 0.25%
#5(#64) Up 50.7%
#6 (#83) Up 16.02%
#7 (# 55) Still Down 13.3%
#8 (#81) Not in trade on Feb 27th, any way Up 0.16%

The Significant part is All the the above accounts (Except account #8)had draw downs of 35% to 61 % on Feb. 27th, and now most of them are
BACK to profits,

These accounts were opened not long ago using "Hedging" and, believe it or not , "conservative" strategies, need outside funds for now until " target trading fund" reached

All results are verifiable and you will have my permission to contact my brokers to check (Except the methodology and transaction details)upon your proof of fund of at least $500,000 (or $200,000 with higher incentive fees) to be equally split into two of my 3 preferred brokers of your choice, PM if your are interested, of course.

I'll have Power Of Attorney to trade clients' accounts ONLY without any access to the funds (except the monthly/quarterly preauthorized fee deductions on a high water mark basis) ,and my Clients are the ONLY ones who have access and control of the funds AT ALL TIME.

Will NOT entertain PMs unless proof of funds are provided. Sorry!

Will try to update the trading results on a weekly basis.





Managed Account Result Summary:

Total Returns as of 5/18/07

Account

#1-----25.7%
#2----116.5%
#3-----43.8%
#4-----28.9%
#5-----91.1%
#6-----47.3%
#7-----15.8%
#8-----29.4%

Note: The total returns of ALL accounts should have been similiar since I have used the same/similiar methodologies, they were not because different accounts started trading at different time and/or with different currency pairs, but they were all started trading after Oct. 2006 or later.






Average Account Gain/Loss for the weeks ending in

4/14 --- 13.2%
4/21 ---- 3.8%
4/27 ---- 1.0%
5/04 ---- 4.4%
5/11 ---- 1.6%
5/18 ---- 9.6%
5/25 ---- Coming!










Details:

Managed Accounts

PW=Profit Withdrawal of individual Account (then trading P/L start from 0% again)
CPW (Cumulative Profit Withdraw of individual account in %)=Total Cumulative Profit Withdraw of individual Accounts)
TPW (Total Profit Withdrawal of ALL accounts)=Total of ALL CPW
APW (Averge Profit Withdrawal per account in %)=TPW/8
TPL (Total Profit/Loss %)=TPW+(Total profit/Loss of ALL Accounts in %)
Av PL(Averge Profit/Loss %)= TPL/8 in %
NW P/L (Net Weekly Profit/Loss of the Week)= Difference P/L between current and previous week in %
T=Total
A=Averge


Act ---#1----- #2 ----- #3 ----- #4 ----- #5 ----- #6----- #7 --- #8-----TPL---- Av PL

4/6 *(-5.5%) 69.2% * 3.1% *( -1.8%) 54.5%* 17.2% (-14.2%)1.8%*124.3%*15.5%

4/14**7.6% *86.3%*18.6%**10.5%**69.6%*25.6%*(-1.3%)13.2%*230.1%*28.8%
NWP/L*13.1% 17.1%**15.5%*12.3%**15.1%**8.4%**12.9% 11.4%T105.8%A13.2%

4/21*12.2% *91.6%*23.3%**14.3%**73.7%**26.6%*2.2%*16.9%260.8% *32.6%
NWP/L PL*4.6%*5.3%***4.7%***3.8%**4.1%**1.0%**3.5%**3.7% T30.7%*A3.8%

4/27*10.4%**91.3%*29.9%**13.6%**80.7%**26.1%*0.95%*1 5.9%268.8%*33.6%
NWP/L*(1.8%)*(0.3%)**6.6%**(0.7%)**7.0%*(0.5%)*(1.3%)* (1.0%)T8.0%A1.0%

5/1* PW** 0%**0%***0%****0%***83.3%***TPW=83.3% APW=10.4%

5/4**15.8%*100.7%*35.5%**17.8%*(0.3%)**30.5%**4.3%*1 9.0%306.6%*38.3%
NWP/L*5.4%**9.4%***5.6%***4.2%*(0.3%)***4.4%**3.3%*3.1 %*T35.1%A4.4%

5/11*16.6%*103.0%*33.1%**20.0%**0.1%**34.8%**7.0%*21 .3%*318.9%*39.9%
NWP/L*0.8%**2.3%**(2.4%)***2.2%***0.4%**4.3%**2.7%**2. 3%T12.6%A1.6%

5/16 PW**********************************38.5%********* *

5/18 CPW**************************83.3%**38.5%*TPW=121. 8%*APW=15.2%
5/18*25.7%**116.5%*43.8%**28.9%**7.8%**9.8%*15.8%*29 .4%*389.7%*48.7%
NWP/L*9.1%***13.5%**10.7%**8.9%**7.7%**9.8%**8.8%**8.1 %*T76.6%A9.6%

5/25 Coming!








Note:Managed Accounts Initial Trading Balances may be different due to constant position re-allocations/profit-takings/strategy-changes .


**Will pay Clients (Insitutions Preferred) Managed Account Referral Fees of 5% for 12 months.


Disclaimer: Forex Trading involves GREAT RISKS and past result is not indicative of future performances!

"No fancy websites! No fancy layouts! Just Results!"


B N
Chief Strategist



PS, Sorry for the messy/confusing layout, I am not good at layout, typing or even wordings,. If you are looking for a "good looking" site/layout, please go look at somewhere else, I am sure there are plenty out there, I ONLY try to focus on delivering good results! Thanks!