Darwinex


rod178

Well-Known Member
The Darwinex new business offer seems interesting and operates is somewhat different to the usual PAMM.

Basically a 'successful' Trader's performance can be 'marketed' (survival of the fittest) and 'Investors' can 'buy' access to the Trader performance - via copy trades which are immediately placed in the market by Darwinex, for a quarterly performance fee(15% of profit for the Trader,5% for Darwinex, remaining 85% for the Investor), after spreads and commissions, which are very competitive.

some Darwinex links, FAQs etc
https://www.darwinex.com

https://www.darwinex.com/explore

https://www.darwinex.com/deposits-withdrawals

http://en.wikipedia.org/wiki/Darwinex

[EDIT by mod: old links were broken as darwinex switched from a /en/ in their URLs to just / and didn't setup redirects.]
 
Last edited by a moderator:

joepippin

Well-Known Member
I recently talked to someone who proposed. 70% to the trader 30% to the investor as long as they traded certain risk parameters.
 

jack

Administrator
Staff member
joepippin said:
I recently talked to someone who proposed. 70% to the trader 30% to the investor as long as they traded certain risk parameters.
That's a really bad cut if you are fronting the risk.

I don't know Darwinex or the specifics of their business, but even top end hedge funds only get a 20% performance take.
 

joepippin

Well-Known Member
Jack said:
That's a really bad cut if you are fronting the risk.

I don't know Darwinex or the specifics of their business, but even top end hedge funds only get a 20% performance take.
Yeah thats what I thought too but top hedge funds require huge deposits. Excess of 10million? Does the split change if say you were only given 50k as a start?
 

rod178

Well-Known Member
Jack said:
That's a really bad cut if you are fronting the risk.

I don't know Darwinex or the specifics of their business, but even top end hedge funds only get a 20% performance take.

The business model seems very different, although still early days, so far as evaluating Darwinex.
 

rod178

Well-Known Member
Jack said:
That's a really bad cut if you are fronting the risk.

I don't know Darwinex or the specifics of their business, but even top end hedge funds only get a 20% performance take.
In the case of the Investor that is the same cut as Darwinex, after spreads and commissions ie 5%+15% = 20%
 

garry

the art of war
i charge 30% of profits high water mark month by month ,that seems average with my experience
 

rod178

Well-Known Member
garry said:
i charge 30% of profits high water mark month by month ,that seems average with my experience
average does not mean that it is good deal for the Investor, especially that the high water mark profits are calculated month by month.
 

garry

the art of war
rod178 said:
average does not mean that it is good deal for the Investor, especially that the high water mark profits are calculated month by month.
for sure depends how good the trader is ,30% is a standard average of profit share across the board
 

rod178

Well-Known Member
garry said:
for sure depends how good the trader is ,30% is a standard average of profit share across the board
If they are good then for 30% they should be willing to carry forward their loss months. And 'pigs fly' ?
 

Ignacio

Member
Hi guys, I work at Darwinex and couldn't avoid jumping into the discussion. I hope you don't mind!

On top of the performance fee, Darwinex's business model provides legal coverage to traders. As you may know, most traders manage investors' capital without being properly regulated, which makes their strategies not scalable (most attract only family & friends' capital to avoid legal issues).

Also, you are not considering the costs of bringing investors in. The good thing about Darwinex is that we bring you the investors. All you have to worry about is trading. So, 20 % vs. 30 % is not that relevant if you compare the number of investors you can attract yourself vs. the number of investors a regulated asset manager can bring you. You'll probably agree that 15 % of 1000 investors is better than 30 % of 10 investors.

Sorry for jumping in, guys, feel free to reach out to me for any question you may have!

Happy New Year,
Ignacio
 

garry

the art of war
Most clients really don’t care if you underperform a benchmark for a year or two. As a general rule, they just want to know that a steady hand is on the tiller and that you’re guarding their money like it’s your own.
and your on time and dont break your word .
 

rod178

Well-Known Member
garry said:
Most clients really don’t care if you underperform a benchmark for a year or two. As a general rule, they just want to know that a steady hand is on the tiller and that you’re guarding their money like it’s your own.
and your on time and dont break your word .
Trust is an 'interesting' concept when the management of money is concerned.

Basically I only trust 'me', and that is probably a delusion as well.
 

jack

Administrator
Staff member
Ignacio said:
Hi guys, I work at Darwinex and couldn't avoid jumping into the discussion. I hope you don't mind!

On top of the performance fee, Darwinex's business model provides legal coverage to traders. As you may know, most traders manage investors' capital without being properly regulated, which makes their strategies not scalable (most attract only family & friends' capital to avoid legal issues).

Also, you are not considering the costs of bringing investors in. The good thing about Darwinex is that we bring you the investors. All you have to worry about is trading. So, 20 % vs. 30 % is not that relevant if you compare the number of investors you can attract yourself vs. the number of investors a regulated asset manager can bring you. You'll probably agree that 15 % of 1000 investors is better than 30 % of 10 investors.

Sorry for jumping in, guys, feel free to reach out to me for any question you may have!

Happy New Year,
Ignacio
Hello and welcome to the forum! :)

We are ok with vendors around these parts so long as they only act in a customer service capacity (like answering questions directed to them, etc..) and do not post promotional material. So your jumping in was fine.
 

jack

Administrator
Staff member
That said, I'm still kinda tilting my head about Darwinex's profit split. I'm just hashing it against other backer/trader type relationships and there's quite a difference.

In the hedge fund world, capital introductions get a cut of the allocation up front and sometimes there's a rider component as well.. but these aren't huge numbers.. Expensive for the fund, yes, but the investor only sees the typical '2 and 20'. Sometimes I hear of one-off agreements citing a 30% cut, such as another poster mentioned in this thread, but that might be given no management fee is charged.

In the prop trading world, where a firm fully backs the trader (not a depository or contribution based firm, but a traditional prop,) we see a huge variety of compensation methods.. but again, the person or entity fronting the downside risk commands a good portion of the profits, and the "legal and compliance"/backoffice work sees but only a fraction of it all.

I have to ask.. what exactly is in it for the investor? What is the investor getting for Darwinex taking up just as much of the profit as the "talent"?
 

Computater707

Well-Known Member
Ignacio said:
Hi guys, I work at Darwinex and couldn't avoid jumping into the discussion. I hope you don't mind!

Happy New Year,
Ignacio
Welcome Ignacio - I have a question. Can a USA resident and citizen participate in Darwinex as either an investor or trader?

I expect the answer to be no, but it never hurts to ask.

Happy new year to you also
 

rod178

Well-Known Member
Computater707 said:
...Can a USA resident and citizen participate in Darwinex as either an investor or trader....
I remember reading on the Darwinex website that they do not accept US residents.

Whatever happened to the concept 'Land of the Free....' ?
 

rod178

Well-Known Member
Jack said:
....taking up just as much of the profit as the "talent"....
My understanding is that 'Talent', ie Trader, gets 15% and Darwinex 5%

Seems like a good deal for the Trader. Whether or not it is a good deal for the 'Investor' would, I suppose, depend upon them being able to 'hook on' to a Trader with long term consistent positive results. My concern as an Investor would always be the fact that quarterly losses are not carried forward.
 

jack

Administrator
Staff member
Ohhhh... You know what? I had that mixed up. For whatever reason I misread the profit split and I thought that Darwinex got 30%, the trader got 30%, and the investor was getting the shaft by fronting the risk and getting less than half the upside.

Entirely a misunderstanding on my end.

If it's an 80/20 split with the 20 being divided between Darwinex and the trader, that's right in line with my expectations and what's typically considered fair.
 

jack

Administrator
Staff member
https://www.darwinex.com/trading/hall-of-fame

High Watermark

Performance fees are calculated on a quarterly “High Watermark” principle.

Investors are charged 20% of their incremental profits to their quarter opening price. Of this the trader keeps 15% and Darwinex keeps 5%.

Performance fees cannot be negative - investors are not re-imbursed for losses.

Yeah, This makes much more sense.
 

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