starting a new hedge fund

Discussion in 'Professional Trading' started by ericb, Jul 15, 2006.

  1. ericb


    hey guys I was thinking about starting a small "baby" hedge fund and was looking for some info on how to establish it. Maybe a good book on how to establish a fund. I really don't feel like paying a lawyer a big chunk of money for something that I can do myself.

    I'm just establishing the fund and putting my own assets into it. It won't be open to other investors. I imagine this is relatively simple.

    Let me know if anyone has any books that they can recommend on this process, I know I've seen them around.
  2. alex104


    i had a hedge fund and if u only use your money what do u need a hedge fund for? if u start a hedge fund u have to be an investment aqdvisor and have a series 65 liscence a lawyer cost 10k and investment advisor paper work cost about 2k

    the firm i used was Grace Financial Group the clear through Goldman Sachs

    if u need a contact there pm me
  3. segv


    There is no need go through the process of creating a fund if you do not intend to have third-party investors. If your intention is to develop a track record, then you need to create an entity that will ultimately be the advisor or managing partner in the fund. There are legal, regulatory, tax, and accounting issues that you need to plan for up front. The best advice I can give you is to get legal advice in your jurisdiction immediately before you proceed. Otherwise if you ignore issues, you might find yourself in a position where you are unable to use your track record to solicit investors. The cost for a single-person entity with expert legal assistance will likely be in the $3,500-$5,000 range - and it is money well spent. Beware, however, of companies offering "turn-key hedge fund start-up kits".

  4. ericb


    I intend on allowing third party investors in, just not at this time. I want to establish the fund, develop a track record and then raise capital. I want to set up what is called a baby or incubator fund. I figure it can't cost a whole lot and the legal work should be minimal if I'm not allowing third party investors in at this time.
  5. you seem to have the answer you were looking for in segv's post above. segv gave you advice that is applicable if you are attempting to establish a track record which you can then use to attract investors.

    Your post directly above makes it sound like you consider 3.5-5K 'a whole lot' in terms of legal advice. It isn't. 3.5K is a minimal amount for the kind of advice you need. If you don't have 3.5K for legal advice you're probably a few years away from starting a hedge fund anyway.