Hedge funds are one of the most dynamic, and important, players in the financial services industry and command worldwide attention. This primer, authored by a leading financial services industry participant, sets out the context of hedge funds and provides you with practical advice on how they operate.
It begins by defining the characteristics and functions of a hedge fund, illustrating who is involved both internally and externally. It goes on to provide a step-by-step guide to setting up a hedge fund and discusses how unregulated hedge funds are regulated.
It looks at hedge fund litigation and directs you to recommended resources. All of this is combined in a format that will enable you to grasp this important, complex subject relatively quickly. Aimed at newcomers to the hedge fund industry, this introductory text is particularly useful for:
- new hedge fund directors who have not previously served on a hedge fund board;
- investors seeking to learn about hedge funds;
- investment bankers that are transferring into a prime brokerage team;
- accountants responsible for hedge fund advisors;
- long-only fund managers that have been asked to co-manage a new long-short global equity hedge fund;
- anyone interested in understanding how a hedge fund works.
- Publish date
- 3 Dec 2007
- 155mm x 235mm
Table of contents
1 Hedge Funds: What Are They?
What is a hedge fund?
Types of hedge funds
Hedge funds globally
Should hedge funds be defined and regulated?
Do hedge funds pose risks?
What type of hedge fund will feature in this book?
2 Types and Structures of Hedge Funds
Corporate, limited partnership and unit trust models
The securities of hedge funds
Strategies and weighting
Funds of hedge funds
Hedge fund variants
3 What’s in an Articles of Association, a Limited Partnership
Agreement or a Unit Trust Agreement?
Sources of law
Incorporation and capital structure
4 Setting up the Hedge Fund
Planning the hedge fund
Identifying service providers - the RFP process
Requests for Proposals
Selecting the prime broker
Selecting the administrator
The investment manager
The selection process
5 Hedge Funds and Service Providers
The investment manager
The prime broker
6 How to Read an Offering Memorandum
What goes into an Offering Memorandum?
Summary (or key features)
Investment objective, policy and restrictions
Net asset value
Fees and expenses
Conflicts of interest
Master fund issues
General and statutory information
Private placement memorandum
7 How are Shares or Interests in a Hedge Fund Marketed?
Due Diligence Questionnaires
The subscription process
8 How is a Hedge Fund Operated?
Preparations for launch
Initial offering period
Research and fund management - and fiduciary duties
Hedge fund indexes and informational services
9 Key Issues: Valuations, Corporate Governance and Side Letters
10 What Happens When Something Goes Wrong?
Prime broker conflicts of interest
Loss of key employees
Adding or changing service providers
Appendix 1. Example Articles of Association
Appendix 2. Documents to Launch a Cayman Islands Hedge Fund