Recommended Hedge Fund Articles for Start-up Hedge Fund Managers
Last week we posted our most popular hedge fund articles to date. This week we are providing start up hedge fund managers with a “hedge fund manager start up guide” which consists of the most important articles for start-up (and existing) hedge fund managers. The following article provide you with the background information you need to be prepared to begin the hedge fund formation process.
Our group has worked with over 200 start up hedge funds and hedge fund managers and we know the issues which managers are concerned about. Please contact us if you have any questions on these articles.
The Basics
- Start Up Hedge Fund Timeline
- Hedge Fund Offering Documents
- Overview of Hedge Fund Investment Advisors
- Hedge Fund Managers
- Hedge Fund Attorney
- Hedge Fund Service Providers
Investors and Fees
- Hedge Fund Investors Overview
- Section 3(c)(1) Hedge Funds
- Section 3(c)(7) Hedge Funds
- Hedge Fund Management Fees
- Hedge Fund Performance Fees
Structural Issues
- Side Letters
- Hedge Fund Hurdle Rate
- Side Pocket
- LP and LLC Fund Taxation
- Hedge Fund Structure: LP and LLC Issues
The Laws
- Overview of the Securities Laws
- Securities Act of 1933
- Securities Exchange Act of 1934
- Investment Advisers Act of 1940
- Investment Company Act of 1940
Raising Hedge Fund Assets
- How to Raise Hedge Fund Capital
- Hedge Fund Databases
- Hedge Fund Websites
- Hedge Fund Due Diligence
- Requirements for Hedge Fund Performance Reporting
- 5 challenges to raising institutional assets
Other Recommended
- Overview of Regulation D for Hedge Funds
- Hedge Fund Blue Sky Filings
- Hedge Funds and ERISA
- Hedge Fund Soft Dollars
- Hedge Fund Report by GAO
- SEC Emphasizes IA Compliance for Hedge Funds
- How to register as an Investment Advisor
- Important Information for Registered Investment Advisors
- Overview of the Series 65 exam
- Fund of Hedge Funds
- Private Equity Hedge Funds
Hedge Fund Service Providers Overview
The hedge fund industry includes not only the hedge fund managers and the investors, but also the service providers which help the hedge fund and the manager with the day to day duties associated with running a hedge fund.
The industry has grown rapidly over the last decade and continues to develop at an ever rapid pace. In the beginning there were hedge fund attorneys, prime brokers, hedge fund administrators, hedge fund auditors, but now we also have consultants, website designers, due diligence experts and compliance firms. All of these businesses fall within the category of hedge fund service providers. I’ve detailed the various roles of these businesses on other parts of this blog, but am producing this overview which should be especially helpful for start up hedge funds. Read more
Paulson to Hedge Funds: Time for Hedge Fund Registration
Treasury Secretary Paulson spoke today about new financial market regulations. In his remarks he mentioned that there should be some new hedge fund regulations which allow oversight by a market regulator. I have posted an excerpt containing the comment as well as the whole speech. Read more
Hedge fund advertising - Can a hedge fund manager run a blog?
Blogs have become important tools in the investment management industry and have allowed even the most unsophisticated computer user (ahem….hedgefundlawblog….) to post useful thoughts and information for other industry participants to examine and opine upon.
Some hedge fund managers may want to use the internet and blogs to vet ideas or to discuss certain parts of their strategy which begs the question if such activities are legal under the federal (and state) securities laws. As we see it, there are three central issues which a hedge fund manager must be aware of when deciding whether to blog: (i) the Regulation D rules prohibiting general solicitation, (ii) the “no holding out” requirement for investment advisor exemption, and (iii) the anti-fraud rules (no manipulation). We will examine these issues in turn and then provide recommendations. Read more
California Investment Advisor Exemption for Certain Hedge Fund Managers
In the article Connecticut Hedge Fund Registration Exemption, we discussed that certain states like Connecticut provide administrative orders allowing hedge fund managers an exemption from the registration provisions under certain circumstances.
Similarly certain states have provided a similar exemption to hedge fund managers through the securities commission rule making process. For example, California Rule 260.204.9 provides that hedge fund managers are exempt from registration with the California Securities Commission if (i) the manager has $25 million or more in assets under management and (ii) has less than 15 clients (a hedge fund counts as a single client). As with all exemptions from investment advisor registration, the hedge fund manager must make sure that it does not hold itself out as an investment advisor. The California Rule also provides an exemption for managers of venture capital funds. Read more
Hedge Fund Soft Dollars - Permitted Soft Dollar Practices
This memorandum contains information regarding eligible and ineligible uses of soft dollars within the safe harbor found under Section 28(e) of the Securities Exchange Act of 1934. This memo is structured in three parts: (i) discusses, generally, the eligibility of research services; (ii) discusses, generally, the eligibility of brokerage activities; and (iii) discusses, generally, mixed-use items. Read more
Hedge Fund Managers Look to Cut Costs - No Hedge Fund Audit?
As hedge fund performance results are weak or negative, managers are becoming more interested in decreasing the costs that the management company bears directly as well as those costs which are borne by the fund. Read more
Hedge Fund Naming Conventions – How to Name Your Hedge Fund
What should I name my Hedge Fund?
For start up hedge fund managers finding the right name for the hedge fund and management company can be very difficult. You want to be able to convey the message with your name, but there are other considerations such as general hedge fund naming conventions and of course the availability of good domain names (for your hedge fund website). Below are some general ideas we recommend when asked about naming: Read more
Connecticut Hedge Fund Registration Exemption
State Level Hedge Fund Investment Advisor Exemptions – Connecticut Exemption
Hedge fund managers which are not required to register as investment advisors with the SEC because of the exemption in Section 203(b)(3) of the Investment Advisers Act may still need to register as investment advisors with the state securities commission of the state where they have their place of business. Read more
Hedge Fund Law - Summary of Hedge Fund Laws and Regulations
he following is a summary of the major laws which affect the hedge fund industry. If you have any questions on how these laws impact hedge funds in general or your specific situation, please contact us.
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Securities Act of 1933 – the 1933 Act was enacted on May 27, 1933 as a reaction to the market crash of 1929. The overarching purpose of the act was to require that all “securities” be registered with the government (at the time the FTC). The Act provides some exemptions from this general requirement; for hedge fund managers, the most important exemption from registration is found in Section 4(2) which provides that securities will not need to be registered is they are sold in a transaction which does not involving any public offering. Read more
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