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Starting a Hedge Fund

 

Hedge Funds Are Wrapper in Fee Structure: Singer

View Original Article Thu, 31 Jul 2014 09:29:39 -0700
July 31 (Bloomberg) -- Ramius President and CEO Michael Singer discusses Arge ntina?s debt default and hedge funds on ?Market Makers.? (Source: Bloomberg)

Hedge Funds Campaign For Puerto Rico Power Authority Debt Relief

View Original Article Thu, 31 Jul 2014 06:58:00 -0700
As the Puerto Rico Electric Power Authority faces a Thursday forbearance agreement expiration an ad hoc group of 19 hedge fund bondholders is evaluating ways to provide financing.

Returns Drive Fees In Private Equity And Hedge Funds

View Original Article Tue, 29 Jul 2014 22:17:06 -0700
If returns are meant to justify the fee levels being charged by private equity and hedge funds, then it is incumbent on all parties to clearly understand and report these returns accurately.

Hedge Funds Face Compliance Hurdles of AIFMD

View Original Article Wed, 30 Jul 2014 14:27:52 -0700
Alternative funds selling to European investors must meet ESMA's strict guidelines for trader reporting, risk controls, and valuations -- similar to SEC's Form PF.

Argentina Unopposed to Bank Deal With Hedge Funds as Bonds Sink

View Original Article Thu, 31 Jul 2014 15:09:47 -0700
Argentina said it doesn't oppose a deal sought by JPMorgan Chase & Co. (JPM) and other banks that would allow the country to resume debt payments, as its dollar bonds sank following a default declaration by Standard & Poor's. Argentina's Economy Minister Axel Kicillof said the government wouldn't oppose a third-party solution to its dispute with a group of hedge funds who successfully sued the ...

 

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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

 

Total cost for services above.......................US $6,900

 

 

 


Contact us now for a
free initital telephone consultation:

 








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