HEDGE FUND FORMATION

Offshore Hedge Fund

The British Virgin Islands (BVI) is an attractive jurisdiction for hedge funds. The legislative structure in the BVI is modern and internationally recognized. It is considerably less expensive to establish a fund in the BVI than comparable jurisdictions such as the Cayman Islands. Hedge funds domiciled in the BVI would benefit from the availability of higher quality banking and custody services in the jurisdiction

Majority of BVI funds are professional funds. To qualify as a professional fund, fund interests may only be made available to investors who are “professional investors”, with the minimum initial investment by each such investor being not less than U.S. $100,000 or its equivalent currency. In addition, the fund sponsors would be required to have an administrator, auditor, custodian bank and two (2) directors minimum (need not be located in the BVI).

A “professional investor” is defined as a person (i) whose ordinary business involves, whether for its own account or the accounts of others, the acquisition or disposal of property of the same kind as the property, or a substantial part of the property, of the fund; or (b) who has signed a declaration that he, whether individually or jointly with his spouse, has net worth in excess of U.S.$1,000,000 or its equivalent in any other currency, and that he consents to be treated as a professional investor.

Our turn-key solution to set up an offshore hedge fund in the BVI allows you to offer global investors the opportunity to invest in your regulated fund.

U.S. Hedge Fund

As a general rule, if a trader manages more than $25 million in separately managed accounts, he may be required to register with in his home state or the SEC as an investment adviser. However, if all of the investors subscribed to a U.S. hedge fund managed by the manager/trader, the manager/trader may not need to be required to register with his state or SEC because of possible exemptions from registration provided by Section 203(b)(3) and 203(m) of the Investment Advisers Act of 1940.

Other possible exemptions which a manager/trader can rely on is the Investment Company Act of 1940 Section 3(c)(1) or 3(c)(7). U.S. fund. For investors residing in the United States, an onshore fund is usually organized as a limited partnership. By purchasing an interest in the partnership, an investor becomes a limited partner of the partnership.

Our turn-key solution to set up a U.S. hedge fund allows you to offer U.S. qual investors the opportunity to invest in your regulated fund.

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