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How to start a Hedge Fund
Asked by David Xu
Hi, I am in the life settlement business and wish to start a fund which focus on this area; Could you please let me know which step should I take first?
David
linkquote888@yahoo.com
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Answer By
First step would be to hire a hedge fund consultant, they would be able to help you determine whether this is a feasible endeavor for you. It is recommended that you have experience in trading and have determined a solid strategy. If after a lot of consideration and research these 5 steps will give you an outline to starting a hedge fund.
1.) Need to acquire capital- original seed capital, your own assets to be invested, investors/partners with assets to invest
2.) Need to plan a budget- administrative expenses: legal, accounting, consulting, brokerage fees
Operation costs, setup/startup costs, website, reporting, marketing, general office expense
3.) Administrative Issues- need to decide which firms you will be working with to start the fund
Professional accounting, auditing, office administration, operations. Legal services (PPM)
4.) Develop a Strategy- to manage money to generate enough positive performance to generate profits
5.) Daily Operations- Method or a plan to run daily operations including,
Calculating the NAV of the fund, apportioning of each of the partners/investors, gains & losses, a tracking method for cash daily/monthly, trade & positions daily/quarterly, independent audits, system for billing and fees, accounting filing (K1), reallocation of profits, trade history, website, updates
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