Fund Raising & Trading Resources execution, following, important, resources, technical

Bluetick1010

Hey guys, I need some recommendations for materials or resources on the following two topics:

- Trading execution: Looking for a how to guide on the technical/executional aspects of managing a book -- not "Day Trading for Dummies," but rather trading platforms, how to get best execution, how the actual day-to-day process of filling orders works from a technical perspective. I know the basics of bid/ask and placing orders, etc. but am looking for a detailed guide covering important issues that I may not be aware of (specifically on the mechanics). I'm going to be trading through an ECN, and to some extent, established prime brokerage relationships.

- A book or guide covering the fund raising process -- what is the standard approach for raising funds, how should one best market their track record, who to speak with, that sort of thing. Basically, a high level overview of how it is done.

There seem to be some guides online and plenty of books on both topics on Amazon, but few are rated, so I'm looking for suggestions from people that have been down this path already. I've already read through some materials from our prime brokers and they were not that helpful.

I have an opportunity to launch a new hedge, and have already secured a small amount of capital from the parent fund I work for. Initially I was only going to be responsible for generating research and investment ideas, but now it looks as though I'm going to be running the whole show (with supervision from the parent fund's PM) and I need to get educated about some areas of fund management I've never worked in (the above) -- people I work with already know how to do this stuff and I don't expect to have to do a lot in either category, but will be involved in the process and don't want to seem like a dumby or have to ask basic, stupid questions.

Please post any helpful responses here or email me at bromion15@gmail.com.

Thanks.

smuggycfa

jcole21 Wrote:
-------------------------------------------------------
> Props brah. Don't burn up from that yellow fevah!

Yeah, it's a wicked case of the fevah... just tryin to stay hydrated...

Swanand

justin88 Wrote:
-------------------------------------------------------
> hey bromion, good to see you around.
>
> i can help you on the execution front, but need
> more detail. (you have my email so feel free to
> hit me up there if you can't share detail here.)
> would you be trading a significant portion of ADV?
> are you taking or providing liquidity? are you
> willing to trade in dark pools? what kind of
> holding period are you talking (seconds, minutes,
> months, etc.)?
>
> as you probably know, most PBs have sell-side
> VWAP-like algos and/or smart order routing. if
> not, familiarize yourself with those terms. their
> algos would probably do better than your own naive
> trading, unless you are not trading much volume
> (no market impact) or looking to foster execution
> expertise within your firm (non-trivial for
> sure).
>
> perhaps a good place to start is Durbin's book
> "All About High Frequency Trading". it's
> technical but pretty accessible, and he's got
> pretty good credentials. (he's a former Citadel
> options HFT guy.) it's also only $15.

Awesome, thanks. Yes, I learned today that I will be doing all of the trading, whatever that means, so I probably should know about everything on your list. I'm going to spend the month of May training with the firm's head trader, so I'll buy and read a couple of books before then starting with Durbin.

We do a lot of small cap stuff in illiquid names over a multi-month or multi-year period (no skimming off the market, etc., so I guess that means providing liquidity?), and are active in the OTC block market as well for opportunities with high multiples of ADV. I know how all of the algo stuff and VWAP stuff works in theory, but have never directly worked with it and don't know much about "market structure" issues like dark pools, high frequency, etc. Up until now in my career on the buyside, I've made recommendations to the PM, who then works with our traders to buy or sell, and that's that. It'll be interesting to get a higher level overview of the fund from a management perspective in all regards (hiring, trading, marketing, local partnerships & banking relationships, etc., etc.).

That's probably a great start, but I'll drop you an email if I have any more questions.

Iginla2011

hey bromion, good to see you around.

i can help you on the execution front, but need more detail. (you have my email so feel free to hit me up there if you can't share detail here.) would you be trading a significant portion of ADV? are you taking or providing liquidity? are you willing to trade in dark pools? what kind of holding period are you talking (seconds, minutes, months, etc.)?

as you probably know, most PBs have sell-side VWAP-like algos and/or smart order routing. if not, familiarize yourself with those terms. their algos would probably do better than your own naive trading, unless you are not trading much volume (no market impact) or looking to foster execution expertise within your firm (non-trivial for sure).

perhaps a good place to start is Durbin's book "All About High Frequency Trading". it's technical but pretty accessible, and he's got pretty good credentials. (he's a former Citadel options HFT guy.) it's also only $15.

lunarfollies

Props brah. Don't burn up from that yellow fevah!

_____________________________________________________
-My friend QQQbbe, we will never forget you.

hoangvu90

We do have established relationships on both trading and fund raising -- the firm dates back to 1992 so everything is completely set up. This is more for my own personal benefit -- I want to learn as much as possible about how this works since I want to go out on my own one day, but I don't want to waste people's time asking basic questions, and we don't have any internal materials I can look at to learn more. And the trading is actually more of a functional request since I may or may not be doing some or all of the trading myself. We have a trader, but the funds are in different time zones, so it may be easier for me to place the trades. If that happens, I'm sure there will be a training period, but it would be better if I could hit the ground running.

Thanks guys, I will look into those suggestions.

kingstongal

Hey bromion, congrats on the gig - seems like it panned out for you the way you hoped.

- Trading execution: Looking for a how to guide on the technical/executional aspects of managing a book -- not "Day Trading for Dummies," but rather trading platforms, how to get best execution, how the actual day-to-day process of filling orders works from a technical perspective. I know the basics of bid/ask and placing orders, etc. but am looking for a detailed guide covering important issues that I may not be aware of (specifically on the mechanics). I'm going to be trading through an ECN, and to some extent, established prime brokerage relationships.

I would go direct to a website of an exchange and see what they have (Nasdaq probably has a section on it). I think it is fairly straightforward and quite mechanical. It is also mentioned in, if I recollect, in the CFA curriculum (maybe level 3) - VWAP and all that. I'll let the others fill you in on that as i'm sure they are fresh on it.

- A book or guide covering the fund raising process -- what is the standard approach for raising funds, how should one best market their track record, who to speak with, that sort of thing. Basically, a high level overview of how it is done.

You could raise that question on Albourne Village. They have 3rd party marketers looking to promote funds on there and others who have been along the path you are taking. I'm sure one of them would talk you through it. The rest is fairly straightforward sales pitching to institutions & HNWI i.e. meeting with asset allocator, presentation detailing opportunity, investment strategy & terms. Also your PB should host events that put you into contact with investors ie promote you.

mp3bu

bromion Wrote:
-------------------------------------------------------
> Hey guys, I need some recommendations for
> materials or resources on the following two
> topics:
>
> - Trading execution: Looking for a how to guide on
> the technical/executional aspects of managing a
> book -- not "Day Trading for Dummies," but rather
> trading platforms, how to get best execution, how
> the actual day-to-day process of filling orders
> works from a technical perspective. I know the
> basics of bid/ask and placing orders, etc. but am
> looking for a detailed guide covering important
> issues that I may not be aware of (specifically on
> the mechanics). I'm going to be trading through an
> ECN, and to some extent, established prime
> brokerage relationships.
>
> - A book or guide covering the fund raising
> process -- what is the standard approach for
> raising funds, how should one best market their
> track record, who to speak with, that sort of
> thing. Basically, a high level overview of how it
> is done.
>
> There seem to be some guides online and plenty of
> books on both topics on Amazon, but few are rated,
> so I'm looking for suggestions from people that
> have been down this path already. I've already
> read through some materials from our prime brokers
> and they were not that helpful.
>
> I have an opportunity to launch a new hedge, and
> have already secured a small amount of capital
> from the parent fund I work for. Initially I was
> only going to be responsible for generating
> research and investment ideas, but now it looks as
> though I'm going to be running the whole show
> (with supervision from the parent fund's PM) and I
> need to get educated about some areas of fund
> management I've never worked in (the above) --
> people I work with already know how to do this
> stuff and I don't expect to have to do a lot in
> either category, but will be involved in the
> process and don't want to seem like a dumby or
> have to ask basic, stupid questions.
>
> Please post any helpful responses here or email me
> at bromion15@gmail.com.
>
> Thanks.

Hey bromion, good to see you back bro!

For trading, your firm should already have established relationships with brokers that you can exploit, no? Especially for block orders, be aware of your firm's allocation to soft dollars and how that can create value to a new broker. If your new fund is going to have sufficient assets to trade, it shouldn't be a problem.

For raising money, one of the PMs I know, held a meeting/presentation with existing institutional clients, pitched his idea of the new strategy/asset class and gauged the amount of interest. He even had some of the clients commit new monies going into this new strategy. You can also have a chat with the consultants your firm deals with on a regular basis, for eg., Mercer, Towers Perrin, Brockhouse Cooper, Hewitt, etc., and see if they have clients who would be interested in switiching managers for similar strategies elsewhere, based on your firm's track record. You can also partner up with your marketing team because most of times they are the points of first contact for submitting RFPs.

Is this what you were asking?

stockjaguar

Palantir Wrote:
-------------------------------------------------------
> There are firms that solely focus on raising
> capital for HFs, used to work for one, you could
> look into those.

Thanks. The firm has absolutely no difficulty raising capital and is constrained only by the amount of capital we can judiciously employ without damaging the expected alpha of the fund.

The purpose of seeking materials is strictly for my own education. The members of the firm who run this business are too busy to explain it to me comprehensively, and I want to be well informed about all aspects of this since it's a great learning opportunity, and since the tolerance for stupidity and ignorance is very low at this firm -- it's been an effective career strategy for me to be over prepared for everything "just in case."

jmh530

There are firms that solely focus on raising capital for HFs, used to work for one, you could look into those.