As I noted above the only way you can have an incubator hedge fund is if you only trade your own money. If you trade money for your family and friends you will need to go through the whole fund formation process which can be done, in some instances, for as little as $10,000. If you traded money for people in separately managed accounts then you would not need to have a hedge fund. In either instance there may be registration issues (either IA or CTA) at the state or federal level. Because of this it is best to discuss your situation with an investment management or hedge fund attorney (see also my blog - Hedge Fund Law Blog). Those managers that trade forex may also have to be registered in the future. They will most likely need to take a new exam called the Series 34 Exam (see www.series34exam.com).
I've used Hannah Terhune's services; she's good but overpriced. As a startup I'd recommend doing EVERYTHING YOU CAN BY YOURSELF while outsourcing only that which you absolutely have no clue over. The internet is a godsend.
I see many groups who operate outside of the state laws because they "think" the laws don't apply to them. Of course, they have never discussed it with an attorney so they don't know and then are surprised when they find out that they need registration or this or that. It is really one of those things where a couple of hundred dollars talking to an attorney could end up saving a group thousands and thousands of dollars. It is one of those things that is not likely to change though.
http://www.greencompany.com/HedgeFunds/HedgeFundIncubatorFunds.shtml GreenTrader offers an Incubator Hedge Fund plan.
What are the advantages of creating a hedge fund versus a CTA? In both cases the trading approach can be the same, correct? Which approach has more overhead? Thank you,
Much cheaper and less hassle to go the CTA route. I used to manage an LP and it was a royal pain in the ass. I switch to individual accounts. Ahhh....I have a life again! If you want to hear my experience send me a PM.
The fees these guys charge should be against the law. Just insanely expensive. Who do they think they are, traders?
All I want to do is establish a fund and invest my own money. It won't be open to other investors. I want to develop a track record with my own funds, but I want a fund to hold my liscenses as well. Does anyone know where I would start? Thank you!