2 thoughts on “Hedge Fund "First-Loss" Capital Programs

  1. Gerald

    Thank you for sharing this information. Could these “risk based accounts” be available to a CTA looking for outside capital to build a track record? I would think that the effective intermingling of manager and client funding in one account would be frowned upon by the NFA.

    1. Hedge Fund Lawyer Post author

      I have not heard of them in the CTA context and I know that most of these programs can’t take on managers who are investing in managed futures because of the inherent leverage in futures. Also, like you mentioned, I would imagine there would be a number of issues at the NFA level.

      Thanks for the comment.


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