Best way to incorporate starter fund

S

stoica147

I have friends/family from different parts of the world (Canada, US, Korea) who would like me to invest on their behalf. What is the easiest way to incorporate?
Offshore? My brother lives in Panama so naturally thought of there.
America requires the series 65 exam and Canada CFA or Financial Advisor certificate to register a hedge fund.
I'm a Canadian citizen and have neither qualification at present time, but I'm willing to consider either path down the road if that is what is needed.

I'm not looking to raise outside funds at present, just from my close circle. Thoughts or ideas :) Thanks!
 
What is your track record? This is more important than fund formation. If you have a good track record some funds will open a sub-fund for you. If you don't have one chances are you will lose the money trying to learn.
 
My track record has been good enough to attract funds (10-20%) compounded over last few years. I'm not worried about trying to raise big funds right now or starting a big hedge fund. I'm trying to get information on best way to do incorporate with friends and family money with potential to build on that.

I'll probably take the series 65 later this year and look to start an LLP in Hong Kong or Delaware. I'm doing a lot of research on that right now.

The goal at the end of this year is to have $500'000 AUM which would be double what I have now.
 
IB Advisor Account (aka friends and family account) would be your best path forward.
You can manage up to $25 million for 15 clients without registration with the state or SEC.
You can also charge management and incentive fees.
 
skilluk said:
IB Advisor Account (aka friends and family account) would be your best path forward.
You can manage up to $25 million for 15 clients without registration with the state or SEC.
You can also charge management and incentive fees.
More...


IB does not take into account your jurisdiction ?!
 
Stoica,

Did you come to any determinations regarding your original post?
I am looking to do the exact same thing, manage funds exclusively (at least for the indefinite future) of my 'close circle'.

I'd appreciate hearing what you found out and/or ended up doing.

Regards,

oversea
 
skilluk said:
IB Advisor Account (aka friends and family account) would be your best path forward.
You can manage up to $25 million for 15 clients without registration with the state or SEC.
You can also charge management and incentive fees.
More...


This is wrong.

First off,
http://www.sec.gov/news/press/2011/2011-133.htm

For many years, advisers to private funds have been able to avoid registering with the Commission because of an exemption that applies to advisers with fewer than 15 clients – an exemption that counted each fund as a client, as opposed to each investor in a fund. As a result, some advisers to hedge funds and other private funds have remained outside of the Commission's regulatory oversight even though those advisers could be managing large sums of money for the benefit of hundreds of investors.

Title IV of the Dodd-Frank Act eliminated this private adviser exemption. Consequently, many previously unregistered advisers, particularly those to hedge funds and private equity funds, will have to register with the Commission and be subject to its regulatory oversight, rules and examination.

Second: If you are planning on charging fees for offering investment advice, you generally have to register with state (not SEC, at your threshold). Whatever registration exemptions you might be searching for, things vary on state by state basis and you should seek advice from a compliance consultant. Guys like http://www.ria-compliance-consultants.com will be a good fit.
 
Also just re-read the original post. You mention this is friends and family. Not sure of the legal requirements of your home jurisdiction, but that probably dominates. I am sure IB friends and family could work for you. Also it enables you to run the accounts as seperately managed accounts titled in your family members' names, so you don't really even need to register any entity (LLC or LP) to do what you are going for. You'll need to check your local home country rules concerning investment advisory. The stuff I posted above probably is of little concern to you.
 
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