Over the years I’ve built up a reasonable track record and now a few friends and family want me to actively manage a significant sum of cash. It would obviously be easier to manage, at several levels, as one consolidated structure rather than managing each individual account (virtually impossible to do). With this, and AIF regulations in mind, what’s the best structure to setup for an investment fund like this? If we enter a LLP, would that still subject me to either Portfolio manager or AIF regulations? How are proprietary capital operations setup? I’d really appreciate an answer on this.
This is a tricky one, many people work in grey areas. I will be only able to suggest you the white ones ;).
Yes many use the LLP route to pool money and then a person manages/invests with it. This is quite simple to setup, but this is “Grey”. This could come under SEBI Collective investment scheme. Last year HBJ capital was issued a SEBI order debarring them, in which this was one of the points.
AIF is probably the best way as it gives you complete independence in what you can do with the funds. But the catch is Rs 1 crore minimum per individual and Rs 20 crore minimum for the AIF
PMS is a decent idea again, 25lks minimum ticket size, but a bunch of documents/requirements to get registered with SEBI. Also, F&O can be used only to the extent of the funds available in the account.
Donno if this was help, but yeah, there is no easy way.
Would it be legal for a group of friends to pool their own money (not from others) and start a partnership account? The profit/loss will be shared by the partners.