question on starting a hedge fund---

[Warrior4g]

is it true than ANYONE can start a hedgefund and trade equities as long as the fund is no larger than 400k and has 15 investors or less? does this rule apply to hedgefunds dealing in equities or bonds? i know it does for commodities.

 

[TheCaymanIsland]

Yes anyone can start a hedge fund. But I think you should consult your lawyer instead of ET.

 

[Warrior4g]

of course but it would be kind of a waste of time to call a lawyer for a general question don't ya think...

 

[nazzdack]

Your clearing firm should be familiar with setting up different types of funds based on the number of investors and assets involved. If they don't know, move your money to a firm that can answer those questions so you don't waste time and money with lawyers.

 

[toc]

'as long as the fund is no larger than 400k and has 15 investors or less?'

Not sure, there is a rule that if you have 15 or fewer clients then you can charge them percentage of returns fee and still not require registration but for minimums funds of 400K...............have no confirmations. Please check with some securities lawyer.

Also in the above arrangement one may not be able to use the performance generated in say two years to be used as hedge fund returns for getting the attention of other clients in the future.

 

[ggoyal]

i don't think there is a rule like that. But you will have to spend about 40k setting it up(lawyers,accountants,etc.). plus a lot of time and effort getting the 100's upon 100's of pages ready. then you also have to set up an offshore fund if you want to take in foreign investors.