Starting a small Hedge Fund??

[cstfx]

Quote from cashmoney69:

whats the law say about managing money?..as long as its under x amt..its ok?.

The old rules about hedge fund registration were thrown out last year which required a fund to be registered if there were more than 15 investors or 30MM in funds. It may still go back into effect, but right now it is not.

If you are investing in commodities, and assets are more than 200k, yo WILL have to be registered with NFA as a commodity pool operator.

 

[marketsurfer]

remember, this guy is only managing family/friends money. top tier anything is only required should he try to raise substantial money from outside his "circle"--- otherwise it's a waste of money.

surf



ps. a top tier lawfirm accepting defered compensation based on the speculative future earnings??? you gotta be kidding me!

 

[anvil993]

Quote from marketsurfer:

remember, this guy is only managing family/friends money. top tier anything is only required should he try to raise substantial money from outside his "circle"--- otherwise it's a waste of money.

surf



ps. a top tier lawfirm accepting defered compensation based on the speculative future earnings??? you gotta be kidding me!

Soros, Robertson, Steinhardt, Bacon, and many, many very successful managers started the same traditional route.

In fact there is a MBS fund here in California, two guys, great experience, backed by friends family with $5mm last Nov 2006, that was formed to short the sub-prime index, and they had a 100% July and are up 212% YTD. They used Paul Hastings, tell you what friend, how hard is it marketing a short bias MBS fund right about now? There capital is up to $12mm and they are receiving capital in $5-20mm chunks.

Second, it is a typical retainer agreement; it has nothing to do with deferred compensation, when you hire a plumber you get an estimate, make a payment, pay balance upon successful completion of the work.

Deferred comp has absolutely zero relevancy.

 

[marketsurfer]

Quote from anvil993:

Soros, Robertson, Steinhardt, Bacon, and many, many very successful managers started the same traditional route.


Second, it is a typical retainer agreement; it has nothing to do with deferred compensation, when you hire a plumber you get an estimate, make a payment, pay balance upon successful completion of the work.

Deferred comp has absolutely zero relevancy.

Hire a solid top tier hallmark law firm, spend your money on a small retainer, these firms will draft an agreement whereby they will await the balance due when the fund launches and raises capital.

please. soros, tiger, steinhardt.....LOL! you are talking the 1960's! that is far from a typical retainer agreement--- retainer agreements are used for plaintiff cases not "hourly work" like hedgee work. very very few, if any top tier law firm would accept an agreement like you outline above to draft papers--awaiting the balance untill funds are raised--please! --first there is no need to, second its not industry standard. no clue where you get this information.

regards,
surf

 

[BrightPropGuy]

Below is a company which provides low cost Fund launches/administration. Have not used them, but heard some good things from people starting small Funds on "shoestring budget":

http://www.turnkeyhedgefunds.com/index.html

 

[toc]

If you are counting on your law firm for networking then you should not be in the business development especially investments related.

Better to learn the basic rules and crucial points upfront via exams, books and seminars so that when it comes to audit, due deligence or legal finepoints, the process is a breeze as you kept your books very efficient. I doubt leaning on the top law firm is the answer to keeping your shop efficient. If the operator knows the areas to look after then law/advisor/accountant are not 'that' important.

End of the day, it is the performance that matters not the fact that you are paying/throwing away $25K/month for a two room office shack in Manhattan.

Can someone elaborate on the 15 investor and 30MM rule being thrown out of picture. Does this mean a Hedge Fund can have upto 99 investors and $100MM+ AUM and still not be required to register.

 

[stussy]

Quote from marketsurfer:

please. soros, tiger, steinhardt.....LOL! you are talking the 1960's! that is far from a typical retainer agreement--- retainer agreements are used for plaintiff cases not "hourly work" like hedgee work. very very few, if any top tier law firm would accept an agreement like you outline above to draft papers--awaiting the balance untill funds are raised--please! --first there is no need to, second its not industry standard. no clue where you get this information.

regards,
surf

sounds like you are just jealous surf.

 

[Arb Under Par]

I hate to sound harsh Anvil, but you really have no clue as to what you are talking about. Legal expenses at a top law firm to draw up docs are going to run well over $25k....which is absolute bs, considering they are basically just changing names and few paragraphs of an existing doc. Launching with only $5mil is extremely difficult and you will need to watch your expenses closely. You are not going to have any institutional money looking at who your law firm is at this level, or without some established track record.

Audits will also run well over $7k from a top firm....try $15k +

You will hear promises of cap intro from prime brokerages....you will never see it unless you are launching with a couple hundred mil and are coming off a prestigious prop desk or leaving a top fund. A law firm is never going to directly help you raise assets. Don't pay increased commissions to a prime for this or think that they are going to help you get your HF set-up....

Anvil, I'm glad that your friends are doing well with their fund, but managing $12mil and getting allocations in $5-20mil chunks seems a little like fuzzy math to me. I allocate institutional capital and can tell you positively that no smart money is going to more than double a managers AUM at that level unless it is some seeding deal.

Good luck with your launch!

Quote from anvil993:

Soros, Robertson, Steinhardt, Bacon, and many, many very successful managers started the same traditional route.

In fact there is a MBS fund here in California, two guys, great experience, backed by friends family with $5mm last Nov 2006, that was formed to short the sub-prime index, and they had a 100% July and are up 212% YTD. They used Paul Hastings, tell you what friend, how hard is it marketing a short bias MBS fund right about now? There capital is up to $12mm and they are receiving capital in $5-20mm chunks.

Second, it is a typical retainer agreement; it has nothing to do with deferred compensation, when you hire a plumber you get an estimate, make a payment, pay balance upon successful completion of the work.

Deferred comp has absolutely zero relevancy.

 

[El OchoCinco]

hedge fund docs are basically a limited partnership agreement and a disclosure document which are 90% boiler plate with a few adjustments to suit the clients. I have created this in the past and you are right $25k is a rip off to charge for it lol.

And no I am not offering my services here to do that for anyone, I left the law behind

 

[Arb Under Par]

Still on the run, Coach?

Quote from optioncoach:

hedge fund docs are basically a limited partnership agreement and a disclosure document which are 90% boiler plate with a few adjustments to suit the clients. I have created this in the past and you are right $25k is a rip off to charge for it lol.

And no I am not offering my services here to do that for anyone, I left the law behind