Monthly Archives: November 2008

Hedge Fund Consultant

Hedge fund consultants are individuals or firms that provide a variety of different services to hedge funds and hedge fund managers. These individuals or firms typically have significant industry expertise and a strong network within the investment management industry. These groups also tend to have a strong working knowledge of the mechanics of the hedge fund investment process. Accordingly, managers will utilize hedge fund consultants for a variety of reasons in order to get the most out of their hedge fund. Continue reading →

Hedge Fund Structure – Hedge Fund Organizational Chart

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A common issue which often arises is exactly what manner in which the investors actually subscribe to the fund and how the fund actually invests the money. The attached chart (Hedge Fund Organizational Chart) provides a typical hedge fund organizational structure. The chart also details the movement of the management fee, the performance fee, the movements of money, and hedge fund subscriptions or withdrawals. Continue reading →

Withdrawing from Investment Advisor Registration – the Form ADV-W

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For many different reasons a hedge fund manager will decide to de-register as an investment advisor. The manager may no longer be required to be registered or a manager may have registered simply for marketing purposes and has found that it is too much of a hassle (and cost) to be registered. In such instances a hedge fund manager can withdrawal from registration by filing Form ADV-W through the IARD (Investment Advisor Registration Depository) system. The process for de-registering is substantially the same whether the manager is registered with the SEC or with the state securities commission. This article will discuss (i) issues with de-registration for the hedge fund manager and (ii) detail the process of deregistering. Continue reading →

Investment Advisor Fraud

Hedge Fund Service Providers Overview

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The hedge fund industry includes not only the hedge fund managers and the investors, but also the service providers that help the hedge fund and the manager with the day to day duties associated with running a hedge fund.

The industry has grown rapidly over the last decade and continues to develop at an ever rapid pace. In the beginning there were hedge fund attorneys, prime brokers, hedge fund administrators, hedge fund auditors, but now we also have consultants, website designers, due diligence experts and compliance firms. All of these businesses fall within the category of hedge fund service providers. I’ve detailed the various roles of these businesses on other parts of this blog, but am producing this overview which should be especially helpful for start-up hedge funds. Continue reading →

Paulson to Hedge Funds: Time for Hedge Fund Registration

Hedge fund advertising – Can a hedge fund manager run a blog?

California Investment Advisor Exemption for Certain Hedge Fund Managers

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In the article Connecticut Hedge Fund Registration Exemption, we discussed that certain states like Connecticut provide administrative orders allowing hedge fund managers an exemption from the registration provisions under certain circumstances.

Similarly certain states have provided a similar exemption to hedge fund managers through the securities commission rule making process. For example, California Rule 260.204.9 provides that hedge fund managers are exempt from registration with the California Securities Commission if (i) the manager has $25 million or more in assets under management and (ii) has less than 15 clients (a hedge fund counts as a single client). As with all exemptions from investment advisor registration, the hedge fund manager must make sure that it does not hold itself out as an investment advisor. The California Rule also provides an exemption for managers of venture capital funds. Continue reading →

Hedge Fund Soft Dollars – Permitted Soft Dollar Practices