Wednesday, November 09, 2005
Documentation Needed to Start a Hedge Fund
The costs of starting a "real" hedge fund is at least what I stated and probably more. Managing a hedge fund is like running a "business", not like trading with an IB account from your home.
Hedge fund world has some good information for anyone interested in starting a hedge fund at www.hedgeworld.com .
See "Starting a Hedge Fund at: www.hedgeworld.com/education/index.cgi?page=starting_HF
A more complete listing of documents that a hedge fund manager may need to create is listed below:
Confidential Offering Memorandum
Limited Partnership Agreement
Offering Memorandum Instructions
Subscription Agreements
Limited Partner's Suitability Letters
Limited Partner's Signature Pages
Legal and Regulatory Handbook
Accounting and Tax Handbook
SEC Regulation D Code (U.S.A. related)
Instructions and Ongoing Responsibilities
Accounting Spreadsheet & Templates
File SEC, CFTC, NFA, and State Forms (U.S.A. related)
Quarters End and Year End Duties
Fund Account Ledger
Prospects and Subscription Log
General Fund Ledger
General Partner Corporate Books and Records
The new hedge fund manager must establish relationships with several industry service providers from the outset of the fund. Some of these include:
Administrator (typically non-U.S.A. related)
Auditor
Prime Broker
Attorney
Custodian and Registrar Bank (typically non-U.S.A. related)
A new manager can expect to spend approximately 25 to 75 thousand dollars in legal and administrative fees. The fees for setting up a domestic fund are, in most cases, less than the fees forstarting an offshore fund. Once the hedge fund manager has enough capital to begin implementing his or her trading strategy, and has established the necessary relationships that are involved in the transactional aspect of the business, the hedge fund can begin trading.
Unless you are a very good trader with access to alot of capital, why would you spend all the time and money starting a hedge fund? It is very hard to raise money in a "bear" market . As an alternative to a hedge fund, a trader may partner with one or two qualified investors(they know) and start a trading partnership or L.L.C. Check with your CPA or Legal advisor for more information.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Hedge fund world has some good information for anyone interested in starting a hedge fund at www.hedgeworld.com .
See "Starting a Hedge Fund at: www.hedgeworld.com/education/index.cgi?page=starting_HF
A more complete listing of documents that a hedge fund manager may need to create is listed below:
Confidential Offering Memorandum
Limited Partnership Agreement
Offering Memorandum Instructions
Subscription Agreements
Limited Partner's Suitability Letters
Limited Partner's Signature Pages
Legal and Regulatory Handbook
Accounting and Tax Handbook
SEC Regulation D Code (U.S.A. related)
Instructions and Ongoing Responsibilities
Accounting Spreadsheet & Templates
File SEC, CFTC, NFA, and State Forms (U.S.A. related)
Quarters End and Year End Duties
Fund Account Ledger
Prospects and Subscription Log
General Fund Ledger
General Partner Corporate Books and Records
The new hedge fund manager must establish relationships with several industry service providers from the outset of the fund. Some of these include:
Administrator (typically non-U.S.A. related)
Auditor
Prime Broker
Attorney
Custodian and Registrar Bank (typically non-U.S.A. related)
A new manager can expect to spend approximately 25 to 75 thousand dollars in legal and administrative fees. The fees for setting up a domestic fund are, in most cases, less than the fees forstarting an offshore fund. Once the hedge fund manager has enough capital to begin implementing his or her trading strategy, and has established the necessary relationships that are involved in the transactional aspect of the business, the hedge fund can begin trading.
Unless you are a very good trader with access to alot of capital, why would you spend all the time and money starting a hedge fund? It is very hard to raise money in a "bear" market . As an alternative to a hedge fund, a trader may partner with one or two qualified investors(they know) and start a trading partnership or L.L.C. Check with your CPA or Legal advisor for more information.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Disclamier:
The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. Past performance is no guarantee of future results.
