Greetings all, I hope you are well. I am wanting to startup a micro-fund in the UK with a basic Ltd company structure. There are some government schemes which I could use to effectively eliminate the majority of the trading risk for initial clients and guarantee them a 10% return. It depends on 1) clients receiving a tax rebate for their investment (30%) and critically: 2) having an agreement with the client to limit total losses and drawdown on their funds to 20%. For the second part. Although there are unexpected risks associated with massive market movements (trade FX; cite CHF, BREXIT). A missing piece will be the confidence by the client that we will stick to the maximum drawdown requirements specified in the deal. So, I am thinking about a way to provide that assurance to a client, possibly through a form of third party 'custodian' who can monitor the regular trading activity on behalf of the client. We intend to start small, so not plugged into any platform or having our own Authorization outside was is permitted within the basic 'Small Registered AIFM' (Manager) with the FCA (UK Regulator). Any Ideas? Would appreciate any thoughts .
Most hedge funds hire a third party fund administrator. This usually runs about $500 per quarter on the low end to +$50k/yr on the high end, depending on the strategy and asset classes involved.
just google "fund administrator UK" and look for small shops close to you. It's like hiring a bookkeeper. In fact, many bookkeepers can double as fund admins.
Thank for this. You're right; it falls within the scope of work undertaken by most administrators. If you are specifically looking for a 3rd party to provide oversight on trading activity and that it complies with any investment agreement then the exact answer would be to use a depository service, in case anyone else is searching. Thanks again.