Do Commodity Pool Operators also need to be registered as Commodity Trading Advisors?
A common question for hedge fund managers which are registered as commodity pool operators is whether they also need to be registered as commodity trading advisors (CTA) with the NFA. The answer is generally no.
There is no need for a commodity-based hedge fund manager (i.e., CPO) to register as a CTA so long as the [...]
Hedge Fund Manager – Information on Hedge Fund Managers
I have seen many hedge fund managers and, like the investment strategies they pursue, each one is different. This article will attempt to discuss hedge fund managers in general, if you have any specific questions, please feel free to contact us.
Who are hedge fund managers?
In general hedge fund managers are people who have a strong [...]
Hedge Fund Performance Fees
The hedge fund performance fee (also known as the “performance allocation,” the “incentive allocation,” the “incentive fee,” among other aliases), is a periodic fee which is calculated as a percentage of any gains of a hedge fund over a predetermined period of time.
The fee normally taken on both realized and unrealized gains of the hedge [...]
Hedge Fund Administrator – What is a Hedge Fund Administrator?
A hedge fund administrator is a service provider to the hedge fund; the main job of the administrator is to provide certain accounting and back office services to a hedge fund as detailed below.
Hedge fund administrator services
Generally administrators will provide a variety of services to the hedge fund manager. The central service is monthly or [...]
Hedge Fund IRA Investments
Individual retirement account (IRA) investments into hedge funds are increasing rapidly. Below are some common questions hedge fund managers have about potential investments by IRAs.
Can an IRA invest in a hedge fund?
Generally yes, however the IRA and the hedge fund must make sure to follow certain regulations which a manager should discuss with a hedge [...]
Hedge Fund UBTI (unrelated business taxable income)
Hedge fund investors are always cognizant of the potential tax consequences of an investment into a hedge fund. One of the issues which a hedge fund manager should be aware of is the concept of unrelated business taxable income or UBTI.
What is UBTI and why is it important?
As it relates to a tax-exempt investor in [...]
Hedge Fund Attorney
What does a hedge fund attorney do for a start up hedge fund?
A hedge fund attorney is the first service provider a start up hedge fund manager will likely contact. The hedge fund attorney will listen to the manager and discuss the investment program. From here the hedge fund attorney will begin drafting the hedge [...]
Hedge Fund Formation Legal Fees
Question: How much does it cost to establish a hedge fund?
Answer: The costs of starting a hedge fund can vary considerably depending on the manager and the manager’s circumstances. A start up hedge fund manager will need to consider the hedge fund start up costs which will include legal costs, administration costs and set [...]
Hedge Fund 13F Filings
Many people talk about watching hedge funds through their 13F filings. A 13F filing is a quarterly report filed with the SEC by “institutional investment managers.” The reports include the name and number of the securities owned by the hedge fund. The term “institutional investment manager” means those managers who exercise discretion [...]
What happens if a hedge fund doesn’t do proper diligence to ascertain that a client meets the qualified purchaser standards?
This question came to us yesterday:
Question: What happens if a hedge fund doesn’t do proper diligence to ascertain that a client meets the qualified purchaser standards? Does the hedge fund have to register or notify the SEC?
Answer: In practice I don’t know how this would happen unless someone at the hedge fund management company was [...]