Where do you begin in launching your own Hedge Fund?
Where do you begin?
Begin by deciding on your trading strategy and assessing your accredited investor client pool.
Begin by deciding on your trading strategy and assessing your accredited investor client pool.
Generally, US Hedge Funds are set up as Limited Partnerships. To accommodate this structure, we set up a Limited Liability Company which functions in the role of General Partner to the Limited Partnership. The General Partner (the LLC) appoints the Investment Manager. The Investment Manager may be a registered Investment Adviser, if you have more than 15 investors, you must have a registered Investment Adviser. The Investment Manager makes all trading and investment decisions for the Fund.
As I mentioned above, we must also set up a Limited Partnership, this is in effect the investment fund partnership. The partners of the fund share in the profits of the fund according to their partnership agreement.
You will need to provide a name for the LLC and a separate name for the LP.
You will need to designate where your office will be located, which custodian you plan to use to clear your trades, which bank your plan to use, who your accountant will be, and if you plan to have a fund administrator.
You will also need a detailed Offering Memorandum, this is the document you give to your clients, it details your trading strategy, what type of risks you plan to take, and what sector you plan to invest in. Attached to the Offering Memorandum is the Subscription Agreement, this is a series of questions about the financial status of your clients to determine if they are accredited investors. As due diligence on your part, you must have each of your clients complete the Subscription Agreement.
How much do you need? There is no minimum to start a Hedge Fund, however to gain access to Capital Introduction you generally need a minimum of one million dollars.
How do you create your own fund? Contact scottgoldringassociates.com />
Posted by Hedge Fund News at 4/13/2009 11:26 AM 
Categories: Hedge Fund Formation
Tags: capital introduction hedge fund formation investment advisor accredited investor
Categories: Hedge Fund Formation
Tags: capital introduction hedge fund formation investment advisor accredited investor
Thanks for the link to starting your own fund. I personally have not reached a point where I can get capital introduction but I am working my way up the ladder. I need to hire some more people.
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