How Do Hedge Funds Communicate With Investors?

[TheBigShort]

Let's say I am an angel investor looking to invest in a hedge fund. Would I be able to login to my account and see my current balance or do they usually give quarterly statements and other than that I am blind?

Assuming no lock up period, if I want to withdrawal some funds is 3 business days a reasonable period to expect upon notice of a withdrawal?

Would my investment be considered a percentage of NAV? Or do they have a different way of calculating my stake in the fund?

Last but not least, when asked what strategy they deploy, what kind of answer would I expect to receive?

 

[dozu888]

usually statements with specified redemption lead time in the subscription agreement... they publish general strategy like long short distressed etc in the prospectus, unless it's black box..

but why hedge funds though... these people are just blood suckers, really don't provide any value.

 

[ETJ]

Most will have a director of investor relations and they are the person you communicate with. Angel investing is something different.
Withdrawals will be based on the agreement you entered into when you invested.
Generally, if they manage money for public entities they will calculate a closing mark on the investments they have they have a closing value - depending on the fund some of their holdings can be fairly opaque and difficult to price early. Most require significant notice for withdrawal and you may not be able to recognize full value if you leave early.

 

[nooby_mcnoob]

Let's say I am an angel investor looking to invest in a hedge fund. Would I be able to login to my account and see my current balance or do they usually give quarterly statements and other than that I am blind?

Assuming no lock up period, if I want to withdrawal some funds is 3 business days a reasonable period to expect upon notice of a withdrawal?

Would my investment be considered a percentage of NAV? Or do they have a different way of calculating my stake in the fund?

Last but not least, when asked what strategy they deploy, what kind of answer would I expect to receive?

Monthly/quarterly statements. I knew of one guy only send statements when they were profitable lol.

 

[ETJ]

So Quantum was a pre IPO investor in a number of Eastern European cell companies. So until the IPO, it was difficult to price the holdings. If the fund has PE, VC or even listed stuff where there isn't much of a public market - you'll have a hard time realizing the value if you leave early. This can be a big concern in funds that focus on distressed companies. Many have the ability to create a lock-up(in your agreement) and simply halt withdrawals because of poor market conditions.

 

[.sigma]

I'm pretty sure you can log-on to your account and see your current balance and trade percentages... If not that would suck, unless you were investing with people who are highly regarded and are known for stellar performances.

 

[tnatrader]

I set up a small fund for friends and family (just a few million) and in the beginning, I would give them quarterly reports, which is basically copied and pasted from IB's Portfolio Analyst. Later on, I got feedback that they would want to see a website that they can log into to check out performance like their 401ks so I set up a website for them and created a simple graph of their performance and their NAV (Capital Account).

In general, hedge funds have a long lock up period and limited withdrawal windows. For me, to make the accounting simple, everything is done on an end of the month basis. For example, if you send me an email saying you want to withdraw money on 11/18, I will send you a check with valuation based on end of business 11/30.

Every fund is going to be different depending on the paperwork that's filled out. Most of it should be in the private placement memorandum and subscription agreement. I also notice that many times, there will be side pocket agreements where paperwork is just boilerplate legalese and the real important details will be different from client to client.

 

[Sig]

Let's say I am an angel investor looking to invest in a hedge fund. Would I be able to login to my account and see my current balance or do they usually give quarterly statements and other than that I am blind?

Assuming no lock up period, if I want to withdrawal some funds is 3 business days a reasonable period to expect upon notice of a withdrawal?

Would my investment be considered a percentage of NAV? Or do they have a different way of calculating my stake in the fund?

Last but not least, when asked what strategy they deploy, what kind of answer would I expect to receive?

You mean "Qualified Investor" I think? Angel investors are early stage startup investors and the lockup is "until you have a liquidity event" and the reporting is "show up at the board meeting because you're probably a director".