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Starting a Hedge Fund

 

Why hedge funds also bought housing and agriculture ETFs

View Original Article Thu, 30 Oct 2014 14:00:17 -0700
Agriculture ETFs gained popularity in the first quarter and the beginning of the second quarter. Harsh weather conditions lifted prices for commodities.

Why hedge funds show interest in Japanese ETFs

View Original Article Thu, 30 Oct 2014 10:00:18 -0700
DXJ tracks the performance of the WisdomTree Japan Hedged Equity Index. The Index and the fund are designed to provide exposure to equity securities in Japan.

Why hedge funds invested in gold in 2Q14

View Original Article Thu, 30 Oct 2014 06:00:22 -0700
GLD accounted for 2.87% of the hedge funds' portfolio in 2Q14. GLD tracks gold bullion's spot price. With an expense ratio of 0.40%, the fund has a five-year return of 14.05%.

Hedge funds muscle into reinsurance, attracting doubters

View Original Article Wed, 29 Oct 2014 06:18:27 -0700
Hedge funds are muscling their way into the market to share the cost of cleaning up after natural catastrophes, but sceptics are questioning whether they will stick around ahead of the next "big one" as underwriting returns fall. Hedge funds have long been big buyers of insurance-linked securities such as catastrophe bonds, which pay high yields until a disaster hits and make up more than 10 ...

Why exchange-traded funds were hedge fund favorites in 2Q14

View Original Article Wed, 29 Oct 2014 10:43:52 -0700
ETFs owned by hedge funds were valued at $36.9 billion at the start of 3Q14. This was an increase of 12.1% from $33.8 billion in the earlier quarter.

 

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Starting a Low Cost Hedge Fund

 

 

 



 

Our professional services begin with pre-launch consultation, document preparations check list, and basic information regarding federal and state rules & regulations affecting your particular fund development and operation.

 

Starting a low cost hedge fund in the U.S. is typically structured as a limited liability company incorporated in Delaware. Depending on which type of fund you choose will determine which set of regulations will apply when starting a hedge fund. Here are some examples of possible regulatory exemptions to which can be relied on when starting a hedge fund in the U.S.:


• Regulation D, Rule 506 of the Securities Act of 1933.

• Investment Company Act of 1940 Section 3(c)(1) or 3(c)(7).

• Title IV of the Dodd-Frank Act.

• JOBS Act, Title II which allows for general solicitation and advertising

 

Setup costs. If you set up a U.S. based hedge fund, your costs should range $15,000+/-. This includes preparing your offering documents, registering the LLC (I recommend Delaware) and having a qualified securities attorney review your offering documents. Any further out-of-pocket expenses are for marketing and travel to meet and greet your potential investors.

 

Calculate ongoing costs. This is where many start up funds fall short. Setting up is easy, maintaining is another story. You will need to consider hiring an administrator who will handle your accounting records, calculate your fees, and run due diligence on your potential investors. All this comes with a monthly cost which is charged to your fund. Administrator costs can range from $500 to $4,000 per month. You will also need an auditor. Technically, it is not a requirement but most, if not all investors demand it. Depending on the "name" of your auditor, yearly costs can be from $5,000 in upwards to $20,000 (Big 4). Again, charged to the fund.

 

Open your bank and brokerage accounts. It is not always necessary to have a prime broker in the early stages of a fund. They become way too expensive. Start with a basic cash account for subscriptions, expenses, distributions, etc. Then open a brokerage account.

 

Decide on a launch date. I have seen funds launch after a certain amount of seed capital is raised. I have also seen funds which launch as soon as the first subscription is approved. This all depends on your minimum investment amount and your trading strategy. It's best to consult with your hedge fund adviser on this one.

 

With a global network of third party service providers, we can introduce to you administrators, auditors, prime brokers, bankers and legal counsel who can work side-by-side with you assuring that you and your fund comply with state and federal tax rules and securities regulations. As a value added service, Frank Nagy Financial Services will also provide global venues of investment trade shows and how to utilize them in your effort to network among accredited and institutional investors.

 

Frank Nagy Financial Services will tailor your fund development accordingly:

 

• Hedge Fund Consultation

• Prepare Hedge Fund Private Placement Memorandum

• Prepare Hedge Fund Subscription Agreement (Qualified investors)

• Prepare Hedge Fund Purchaser Questionnaire

• Prepare Hedge Fund Purchaser Representative Questionnaire

• Fund Administrator Introductions

• Fund Attorney Introductions

• Fund Auditors Introductions

• Introduction to International Investment Trade Shows

• FREE list of over 4,000 Institutional investors

• Obtain Bloomberg ticker/submission

 

 


Contact us now for a
free initital telephone consultation:

 








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