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Starting a Hedge Fund
- Thread starter ktm
- Start date
Quote from lynx2004:
anyone?
Forming a LLC seems to involve just filing some forms w/ the Secretary of State...am I missing something?
That's how I operate. I trade through an LLC for a couple wealthy individuals and share profits at 20%. I'd researched the "hedge fund" route and found the costs and regulatory hassles not worth the effort. I was also advised by attorneys that so long as I keep things small and don't expand beyond a couple "friends" I can avoid registering as an investment advisor so long as I have contractual agreements with my "friends".
And regarding the LLC, in many states you don't need an attorney. There are paralegal services that can do it for you for a few hundred dollars.
But that's just me. I like to keep things simple, and as a former business owner, I've learned to avoid complications and regulations whenever possible.
This was an interesting thread to read, and glad it was brought back to life.
What's ktm's status now? Did he put together a fund structure?
Quote from DT-waw:
Anyone knows smth about "T4T s.r.l." CTA? Esp. what markets they trade?
It's a group from Padova, Italy, that trades stock index futures. They use a short term trend following approach with a holding period of a few hours and sometimes overnight.
Aaron Schindler
Schindler Trading
Quote from TruthTeller:
That's how I operate. I trade through an LLC for a couple wealthy individuals and share profits at 20%. I'd researched the "hedge fund" route and found the costs and regulatory hassles not worth the effort. I was also advised by attorneys that so long as I keep things small and don't expand beyond a couple "friends" I can avoid registering as an investment advisor so long as I have contractual agreements with my "friends".
And regarding the LLC, in many states you don't need an attorney. There are paralegal services that can do it for you for a few hundred dollars.
But that's just me. I like to keep things simple, and as a former business owner, I've learned to avoid complications and regulations whenever possible.
This was an interesting thread to read, and glad it was brought back to life.
What's ktm's status now? Did he put together a fund structure?
Thanks, I'll check some paralegals re: LLC
Are your clients have the accounts in their names or some LLC type of entity acct? The reason I'm asking is that some clients prefer the hedgefund structure for liability reasons. Also, hedgefund structure seem better for taxes as well, that is...K-1s are on net profits after fees where as deducting the fee as an investment expense is subject to 2%? floor, i think.
Quote from lynx2004:
Thanks, I'll check some paralegals re: LLC
Are your clients have the accounts in their names or some LLC type of entity acct? The reason I'm asking is that some clients prefer the hedgefund structure for liability reasons. Also, hedgefund structure seem better for taxes as well, that is...K-1s are on net profits after fees where as deducting the fee as an investment expense is subject to 2%? floor, i think.
I purposely do not hold funds. I simply enter trades in their brokerage accounts via trading access, and share in the profits. The accounts are in their name, and under their control. They write their checks to my LLC, with which they have a contract and everyone is happy.
However, once you get involved in managing/controlling funds, or expanding beyond a small circle of acqaintances, IMO it is time to consult witih a good securities lawyer because you are moving into a regulated environment.
Quote from ktm:
I did finally get it all together. Things are going well and I've been up and running for a couple of years now.
Congatulations!!
If you don't mind me asking, what structure do you have? LLC as the GP (you) managing the LP Fund? And do you have another LLC receiving the mgmt fee?
Quote from ktm:
I did finally get it all together. Things are going well and I've been up and running for a couple of years now.
Excellent. Good the hear. This thread reads like a novel and I needed to get to the climax.
In reading the thread I got a good laugh at Don Bright sticking his nose in frequently to keep plugging. He was the comic relief in an otherwise tension-filled plot.