Monthly Archives: January 2009

Hedge Fund Taxation – Law School Professor Perspective

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Overview of Hedge Fund Taxation

The following is a reprint of the Joseph Bankman’s testimony before Congress.  Mr. Bankman is a professor at Stanford Law School.  While the testimony has a bias against the current hedge fund taxation structure, it provides a great overview of hedge fund tax issue, specifically the taxation of the hedge fund performance fee (also known as a “performance allocation,” “carried interest” or “carry”).  Ultimately the future of the hedge fund taxation regime will be decided in the political arena, but this article provides a good overview of the arguments for changing the current tax code.  Continue reading →

IRC Subchapter K – Partners and Partnerships

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Below is Subchapter K of the Internal Revenue Code.  Most hedge funds are taxed as partnerships and we discuss some of these provisions from time to time on this website.  Please let us know if you have any questions on hedge fund tax or if you would like to start a hedge fund.  Continue reading →

Hedge Fund Comments/ Questions and Answers

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Questions and discussions from Hedge Fund Law Blog readers

I get quite a few questions from readers and usually I am able to answer these questions via email within a couple of days.  If you have any questions, comments or simply want more information on starting a hedge fund, please feel free to contact us.  We also will take requests for blog posts on certain issues and we also will publish articles (with all appropriate recognition and links) by guest authors.  [Note: any grammatical errors in the original messages have not been corrected.] Continue reading →

Forex Hedge Fund Launch

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Henderson Global Announces Forex Hedge Fund

The British hedge fund manager will be launching a forex hedge fund in the first half of 2009.  The fund will be targeted towards institutional investors and will trade based on quantitative metrics.  The fund is expected to invest in G10 currencies and potentially emerging market currencies.  The traders are reportedly acquisitions from Fortis.  The full article can be found here. Continue reading →

Another Ponzi Scheme

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Broken Record

I’ve said it all before.  The following press release can be found here.  Please see the following articles on hedge fund and investment advisor fraud.

Continue reading →

Hedge Fund Taxation

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(www.hedgefundlawblog.com)

Overview of the Tax Issues Affecting Hedge Funds

One of the most important aspects of the hedge fund structure are the tax aspects as they relate to the hedge fund, the manager and the investors.  This article will detail the important tax aspects which are relevant to most hedge funds.  Please note that any of these individual tax aspects may or may not apply to certain hedge funds – for information on a particular fund’s tax attributes, refer to such fund’s private placement memorandum.  Please also note that this article is not seeking to provide any sort of tax advice to managers or hedge fund investors, please see our disclaimer for information on IRS circular 230.  [The following article deals with domestic hedge fund taxation.  We will provide another article on offshore hedge fund taxation in the future.]  Continue reading →

Hedge Fund Predictions for the New Year

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Typically we do not comment non-law related hedge fund news stories.  However, we’d like to point attention to a very good article which opines on the likely trends for the hedge fund industry in 2009.  This article will be good reading for those managers who are starting a hedge fund in 2009.  The following are the takeaways from the article:

– Market neutral strategies to see increased demand
– Trend toward less leverage
– Investors are expected to ask for increased transparency and liquidity
– Short biased funds will be popular
– Commodity programs will become more popular
– Shrinking assets until end of Q2
– Institutional investors expected to dominate investor landscape Continue reading →

Commodity Hedge Fund Reminder

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CPOs Reminded to Always File Timely Reports

The following release details the CFTC sanctions against four commodity pool operators (CPOs) for failure to make timely filings with the NFA.  The CPOs failed to make filings of the respective commodity pool annual report.  This report must be provided to all pool participants (investors) and must also be filed with the NFA.  In certain circumstances the NFA will provide extensions to CPOs.  We also note that the filing requirement applies to those CPOs who run hedge fund of funds which are also commodity pools.  Continue reading →

New Mexico Hedge Fund Law

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Starting a hedge fund in New Mexico

Hedge fund managers who reside in New Mexico will be deemed to be investment advisors under New Mexico’s securities act and, unfortunately, there is no exemption available from the registration provisions of the act.  This means that before a manager establishes a fund based in New Mexico, he will need to become registered as an investment advisor.

The people at the New Mexico Securities Division are fairly knowledgable and have been very helpful in the conversations we’ve had with them.  However, they have a horrible securities division webpage.  The webpage has very little useful information save for the links to the New Mexico laws (which are hard to navigate through).  I have posted below a list of the fees which are applicable to a hedge fund manager establishing a business in New Mexico. Continue reading →

Hedge Fund Job Posting

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Below is a job posting for a hedge fund job.  If you have any questions (or if you have job postings or press releases), please feel free to contact us.

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Hedge Fund Partner w/ Significant Portable Business

A mid-sized firm in New York has an immediate need for a Hedge Fund Partner.  The partner will represent individual and institutional fund managers in the establishment and ongoing operation of private investment funds (hedge funds and private equity funds), both domestic and offshore. Experience in the following practice areas are preferred:  Mergers & Acquisitions, Joint Ventures and Strategic Alliances, Asset-Based Finance, Investment Management, and Corporate law.  Great location and firm to build existing practice.  Top benefits package.

Promotion Recruiting & Consulting is a professional legal search firm.  We assist law professionals in their job search and law firms who employ top talent in the Eastern, US.

APPLY:  Send resume to Ericka Meens at [email protected] (please mention the Hedge Fund Law Blog) Continue reading →