Abandon hope all ye who enter here – Dante Alighieri, The Divine Comedy
In 2014 I read an article by Andreas Clenow, Why managing your own money is a bad trade, that resonated with me because it elaborated on what I was already pretty much thinking myself. To wit, managing OPM (other people’s money) is the logical next step once you’ve put together a decent strategy. There are exceptions (Jesse Livermore for instance), but generally this is how the big names in the trading/investing world became big in the first place: from Warren Buffett, to George Soros or Paul Tudor Jones.
The thing I learned though during this year is that it’s practically impossible to branch out into OPM if you’re coming from the retail side, armed just with a track-record. Assuming it’s good or even decent, no one that counts is going to look at it – above the stigma that retail side carries with it, there’s a lot of competition from established professional traders who nowadays cater to individual investors too, not only to the traditional market of $1M+ net-worth people that can invest in hedgefunds.
There are a plethora of firms that promise to connect home-based traders with investor capital – perhaps the one that appears most impressive being FundSeeder, which has Jack Schwager on board. Notwithstanding the sometimes persuasive marketing of these companies, my opinion is that it’s all a waste of time. Each firm has a slightly different revenue model and they might end up being profitable. But a trader hoping to access meaningful OPM through them, will be sorely disappointed. Of course, there might be exceptions just as there are people who win the lottery twice.
I’ll finish this by saying that I don’t know a surefire way to attract OPM, if you’re a regular Joe with no experience/acquaintances in the high finance circles. I do know though that what you find by googling ‘get funded’ or variations thereof will be a dead end.