[jakarta]

It depends on how much back office work you want to do yourself. A lot of young fund managers get enamored by the prospect of being able to spend all their time looking for investments that they forget about the administrative work required to run a fund.

A friend runs a $3M fund where audit, legal, book-keeping/accounting costs about 0.8% of assets. This guy does A LOT of the back office work himself. You can actually hire other firms to do stuff like cut checks, client contact, etc. It just raises your costs.

Also, what some young guys will do is sell a percentage of the hedge fund business up front, in order to secure capital that will pay for initial start up costs, compliance, a living salary for the first year. So maybe you will sell 20-30% of equity in the fund up front to get that.