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Starting a Hedge Fund

 

Investors still loving hedge funds even as Calpers exits-data

View Original Article Wed, 17 Sep 2014 11:10:50 -0700
Despite the recent rebuke of hedge funds by the influential California Public Employees' Retirement System, other investors are pumping billions into these portfolios, boosting industry assets to a record $3.1 trillion, data released on Wednesday show. Research firm Evestment, which tracks asset flows around the world, said that global hedge fund assets grew by $49.6 billion last month. Since ...

Ohio, Illinois Stick With Hedge Fund Bets as Calpers Flees

View Original Article Wed, 17 Sep 2014 10:55:17 -0700
Pension funds including those in New Mexico, Ohio and Illinois said they don't plan to exit the asset class after the $298 billion California Public Employees' Retirement said this week it will pull its entire $4 billion in hedge-fund investments. New Jersey's $77 billion state pension fund in June said it had added $1.1 billion to hedge funds since the start of its 2014 fiscal year, to protect ...

James Says Use Buyouts to Shoot Lights Not Hedge Funds

View Original Article Thu, 18 Sep 2014 08:54:39 -0700
Blackstone Group LP President Tony James said the decision by the $298 billion California Public Employees? Retirement System to exit its hedge-fund investments was ?wise? because the pension had ?poor? returns on the $4 billion it invested in the asset class.

Calstrs? Hedge-Fund View Unchanged as Calpers Divests

View Original Article Wed, 17 Sep 2014 08:38:47 -0700
The California State Teachers? Retirement System will keep investing in hedge funds after the state?s public-employee pension move to exit the asset class, Chief Investment Officer Christopher Ailman said.

The Shocking Admission of This Shuttered Hedge Fund Manager

View Original Article Wed, 17 Sep 2014 06:30:21 -0700
It's no longer surprising when hedge funds close their doors. According to a website that tracks hedge fund "implosions," since late 2006, aptly-named The Hedge Fund Implode-O-Meter, at least 117 major funds at 71 fund families have shuttered.

 

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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 $6,000 to $10,000. 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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