How to raise funds from Asset Management Compnay for Stock Markets?


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Firstly I would say that I was wrong about raising funds from Venture Capital,Private Equity,Business Incubator or Angel Investors for Stock Market.Subsequently I came to know about Asset Management Company where there is a way of raising funds for stock market.

Does anybody have the idea how it works for a novice person like me in this particular field.Are there already established companies where we can raise funds directly from them or if no,should a person start his/her own firm of this kind.If there are many incorporated Asset Management Companies in every country do they have their own rules that only a country-based citizen can raise funds or anything etc.

Talking about the way to raise funds,should we show some kind of business plan or what should we mortgage anything or etc etc?

Please answer in an elaborated way as there are some technical jargon a simple person like me would not be able to understand.

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asked Aug 1 '11 at 23:38
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Himanshu Prasad
51 points

2 Answers


1

You need to know and understand the Jargon before you'd be able to deal with anyone trying to get money from them for you to invest. You'd have to be able to explain your strategy and why they would be better off letting YOU play with their money instead of someone else with a good track record for such things.

The same goes for starting an Asset Management Company. People are unlikely to invest with someone who has started such a company unless they have proper qualifications and time working in the industry, along with appropriate certifications.

If you want to learn about terms and concepts of money/finance/stocks/etc, I'd recommend reading the book 'Wall Street Words '

Before I would invest with a Asset Management company for example, I would look at the qualifications of the founder and portfolio managers. I would expect the owner to have at least (if not far more) 5-10 years of experience in the financial industry and have a CFA (Chartered Financial Analyst) cert. Likewise I would expect the senior portfolio managers to have CFA's or CFP (Certified Financial Planner) status.

If I worked for a such a company, I would not be unlikely to invest my clients funds with someone who was unproven, and would be looking for someone that had established a successful track record, usually working as a trader for some other firm, or at the very least with their own money over a period of several years. They would also need to explain their strategies, tactics etc to my satisfaction before I would risk any of my clients money by having them invest it.

answered Aug 2 '11 at 03:46
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If there are any technical words you may not understand, it would seem you're not ready to become an asset manager. Asset management is an extremely competitive field, in which managers are expected to have a record of success in a particular type of trading (e.g. distressed credit, long-short equity, volatility arb, merger arb, etc.). Your strategy would certainly have to be well established, and you would have to sell highly educated investors on why your strategy makes sense. Perhaps even more importantly, the current trends in the asset management industry are to take less risk. A novice manager such as yourself would be a highly risk investment, indeed.

Furthermore, there are high barriers to entry in terms of regulation. There are a lot of legal things to get squared away to be sure you don't break any laws. If you phrase something incorrectly or market in the wrong place, you could be facing serious charges from the SEC. That needs to be taken seriously (disclaimer: I'm not a lawyer).

One last thing. It sounds like you may have fallen victim to one of the many technical analysis traps there are out there. If you've devised some strategy that involves looking at price movements in a stock, and it works in the past -- trust me, that doesn't mean it will work in the future. There are zillions of little "indicators" and things that show 300% annual returns historically, but the people who use them never hsow a 300% return. :)

answered Sep 1 '11 at 11:04
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Jason
279 points
  • Thanks for your reply Jason. – Himanshu Prasad 12 years ago

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