Hedgefund company: Learn how you can start a hedgefund company
Hedgefund company: Learn how you can start a hedgefund company

By quintomudigo | Teacher forex school | 4 weeks ago

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For those traders wanting to create hedgefund companies but don't know how hedgefund companies operate let me explain some details to you. A hedgefund company makes money by charging commission fees plus performance fees. For commission fee, if you are an investor and want to invest to a hedgefund company you will be charged first with certain percentage of commision fees of the amount you want to invest. The commission fee may vary from 1% to 2% of the money invested. If an investor want to invest $1000,000 account to your hedgefund company to manage it, then you happen to charge them 1% of that amount, then it will become $10,000. This commission fee will be used to pay expenses of the hedgefund company such as electricity bill, internet bill and other employees bill. After that we can go to performance fees. For performance fees, most hedgefund companies charge their clients between 10% to 30% performance fees of the profit made. As a hedgefund company you may decide to agree with your client such that if you you make a profit of less than 20% on the account you will be managing, then your performance fee should be 10% of the profit made while if you make a profit of over 20% then the performance fees should be ranging between 20% to 30%. If you happen to be operating an account worth $1000,000 then you happen to grow it by 20% the whole year,then the profit made will be $200,000. If you charge them a performance fee of 30% of the profit made, you will happen to make a profit of $60,000 the whole year from that one account. If you are managing 10 clients accounts worth $1000,000 each and you happen to grow each client's account by 20% the whole year, that will sum to a total profit of $2000,000 the whole year. If you subtract your performance fee from the profit made, it will be $600,000 the whole year. Is this not a good business with good resources and well created strategy and risk management provided that you have complied with capital market authority and you insure the funds of your hedgefund company.


quintomudigo
quintomudigo

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Teacher Forex School.


Teacher forex school
Teacher forex school

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