Recent content by Invoco

Man, As an attorney, I am not sure what "legal risk" you are referring with respect to a partnership. There is no greater legal risk to a US investor in a US partnership than in an offshore partnership. I have worked with hundreds of hedge funds as general counsel to a publicly traded...

Man makes some good points. However, he is incorrect in stating that most US hedge funds have an offshore operation. Most US hedge funds are managed by a US based entity (e.g., a corporation or LLC) which is owned by the person starting the fund. Also, as compared to US operations, offshore...

Creating a hedge fund involves two principal steps. Step one is administrative. That is, forming the entities and drafting admission documentation (e.g., a private offering memorandum, agreement for admission, operating/partnership agreement, subscription procedetc.). Step two is raising...

Mama, I just realized my last response to you was never posted. The answer is that you can approach any BD. However, that BD must be approved to do private placements.

Filing fees for the State of Florida total $125 for a new LLC. Fees for preparing the required documents (e.g., attorneys or consultants) vary greatly depending on what you will be doing with the LLC (i.e., will the LLC be set up as a hedge fund, etc.).

mama, In the scenario you describe, the person would definitely need to be licensed (7 and 63) and registered with an NASD/SEC broker/dealer that is registered in each state where a prospective investor is contacted. Be careful!

AAA, Yes and no. Funds that invest in futures contracts (including e-mini contracts) are considered commodity pools and must make additional disclosures and are subject to certain CFTC regulations and audits by the NFA or CFTC. However, the fund manager does not have to be registered as a...

The short answer (without giving legal advice) is yes you would most likely be selling a security.

AAA, You are right most--if not all--hedge funds are private placements which are exempt from state and federal registration. However, as you probably know, each state has its own disclosure requirements--even for private placements--and many require the filing of certain documents (i.e...

The problem with "pooling money" in an llc or LP is that you will most likely be considered to have created and sold an "unregistered security" under federal and/or state laws (i.e., the interest in the llc in exchange for the trading capital). Strict compliance with state and federal...

In most cases the decision to form a hedge fund is based on economics. Hedge fund managers can typically earn more than money managers because hedge funds can usually raise more capital than "unregistered" money managers. This is because unregistered money managers are limited in the number of...

There are four basic steps: First, you need to form the legal entity that will act as the actual fund (typically a limited partnership or limited liability company "LLC") and the entity that will act as the fund manager (typically a corporation or LLC) during this process you will also need to...

p2, Mr. Weissman is correct. You can inquire about "how" to raise funds but you cannot "ask" for funds on a public forum--which I think you may have done in one of your posts. However, these restrictions are not specific to hedge funds; they are based on SEC rules and state laws relating...

p2, Be careful how you go about soliciting funds for your hedge fund. Any form of general solicitation or advertising--which would include posts in any of these forums-- violates SEC and state blue-sky laws.