tnp20

I did see some older posts about fund administrator below $1000/month but didn't see any names mentioned .... any names that do a good job for small funds ?

We are opening the fund up to outside investors after a year as an incubator fund. One we open, our profile will be: ==================== AUM: $5-$10M Clients: 5-10, all "qualified clients" in multiple US states We intend to charge a low annual maintenance fee of 1% to cover basic running costs (No salary). Does anyone know of good, reasonably priced Administrator and Audit/Accountant for a small fund with low annual maintenance fees. Anyone doing the administration part in-house by themselves ? What are the ways to keep costs low ? Suggestions and recommendations would be appreciated.

Lots of useful commentary on this thread too about the challenges of Hedge Fund or RIA.... http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/stevens-fund-2012-annual-report/

My partner has sizable assets. Mine are more modest but well above multi-million. We do plan to increase the amounts we put into our Hedge fund over time. Technically my partner doesn't need to do this as he is already financially very secure. But this is his hobby and loves to trade/invest... he has been doing this for the last 30 years. I made my money with a different strategy but his strategy on a risk adjusted basis is way better than mine and with a more solid, consistent and absolute track record and we think his strategy is a better one for institutional and wealthy clients as it is highly differentiated to what nearly everyone else is doing.

I am in the process of setting up an incubator fund. This is a pre-cursor to a fully blown hedge fund. It costs about $3000 to get the incubator fund set up. We are in the process of setting up brokerage accounts. My team consists of me and my partner. We have the investment strategy down to a pat as my partner has been successfully investing with this particular strategy over the last 30 years. His returns are in the order of 15% over this period without a losing year...but this is in his personal account and now we are trying to leverage that with outside funds. Here is our rough game plan: (i) Set up brokers accounts and start investing incubator funds. This is only our money at this stage. - We have identified and interviewed a Fund administrator and a Fund auditor/accountant. We will probably only use the auditor to produce certified fund track records so we can sell the fund record when the time comes. The fund administrator will be hired later. (ii) Whilst we develop an audited track record for the next 12 months we intend to do the following: - Get an indication of interest from family members, friends colleagues....absolutely no advertising or marketing at this stage - prepare for series 65 exam. Not sure about series 7 as only my partner and I intend to run the fund and solicit clients. - Take what ever steps necessary to become a Registered Investment advisor and register with state and federal agencies to be able to start soliciting clients legally ....some of it might be state specific so we have to figure out where bulk of our initial investors are coming from. (iii) Some point down the road, convert from an Incubator fund to full Domestic Hedge Fund - This is an additional $20-$30K in legal fees and have to prepare a fund prospectus - Meet other registration and solicitation requirements with state and federal (I believe the levels depend on asset size...$25M is one level of regulations, next one is $100M when you have greater legal scrutiny from the regulators) (iv) Start marketing the fund track record and strategy - we will let out numbers and unique strategy do the talking. Our real focus is institutional and ultra wealthy individuals as clients. We only want a handful of clients. We don't want mom and pop investors in the long run to manage the absolute number of clients. (v) Hire a fund administrator - doing the fund accounting is time consuming and so would rather pay a fund administrator $600-$1000/month to manage all of that. (vii) Institutional clients want additional structure and controls in place --> prepare fund for institutional clients ...this may take another year. Many thanks for lot of folks on this board to get us started. We used their advice to get started....and are in progress right now. Here is the old link of how we got started, the delay has been due to personal situation. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/setting-up-an-investment-fund-need-some-advice/ Any tips on the rough game plan would be greatly appreciated. I want to emphasis that the "Investment" and "Strategy" part of this has been nailed town to a large degree as we have been doing this with our private money for many years. Yes, there is an issue of capacity and size, but we think our strategy can scale and absorb lot more money without a significant degradation in returns....so the only new part to us is the hedge fund process, operations and the marketing/sales side.

Apparently, its already gone ex here in the USA. Schwab would not let me trade it online today except through their global brokerage. Reason given was that due to Martin Luther day on Monday, 2 business days would be today and friday. So it went ex-today here in the USA.

I won't mention names but we got very different flavors in talking to the various Law Firms. What is right for you depends on your circumstances so I am not making a blanket recommendation on the InvestmentLawGroup, but they seemed best fit for us. There seems to be a circle of attorneys, administrators, managers, accountants, auditors that know each other and have been doing business with the same clients for a while so when one of them asks who we are thinking of going with and we mentioned a few candidates, they either are in the circle or outside it and relatively new. Some firms practice just Investment Fund/Hedge Fund/Incubator Fund setup as their core business and have the process down to a fine art - Others have this component as a smaller part of their overall financial industry legal practice. That other component that they offer is what will make the difference if your fund structure needs additional help beyond just a basic setup. Costs varied. For an incubator type fund, we got a quotes of roughly $4000- $10,000. It varies because if the operating agreement between the founding partners is complicated, more billable hours will be chewed up , but if your operating agreement is boiler plate with few mods, you are looking a the lower end of the cots. This fee is all inclusive and includes the state filing fees - in our care Delaware fees are ~$800. Once you have established a performance track record, you will want to open the fund up to outside investors. The PPM and other stuff needed to do this will cost approximately $15-$20K. This is additional cost that will be incurred down the road when you want to open it up to outside money. The other important question for us is whether we needed an audit it and have a administrator/manager/accountant. For Audited performance - you are looking at $7000-$25K depending on the brand name of the firm. There is a cheaper option called Performance Tracking Table which will costs $2000....this may be good enough to sell your track record to outside investors - but some institutional clients may need fully audited results. For Account management/Administration - you are looking at less that $1000 per month - they keep track of client accounts and mail out statements etc. Initially, for incubator, you are unlikely to need this. Thanks for all of those folks on this board who helped us get started. Much appreciated. If there is specific experience that folks are looking for, I'd be happy to share my perspective to return the favor to the board, though I won't mention any names - just the nature of the experience.

So spoke with a whole bunch of attorneys since I started the thread. We are going with Brent Gilette of InvestmentLaw group...professional, reasonable prices and been in the business for a long while so knew a lot of stuff and options.....

Thanks again for all the input from everyone. Actually got a lot of useful information.

in USA.

Friend of mine and I are thinking of setting up an investment fund. We are considering a partnership model or LLC. Our goal is to run our own money for 2 years to establish an audited track record and then open the fund to outside money and charge a small fee for managing money though not the typical 2-20 hedge fund model....something lot less onerous. We are looking for absolute returns by exploiting special situations - rights offering, arbitrage plays etc. For the first 5 years, our fund is expected to be less that $25M. What is the best structure that we should look at to set up and how much can we expect it to cost both upfront and ongoing running costs. Looking for pros and cons of the different structures. Also looking for legal contacts to start discussions. The fund will initially be seeded with $1M. Thanks Tom

After he got the aircraft carrier question wrong, I stopped listening to the rest of his message..... UK , French, Russians and Indians have aircraft carriers which he did not count.

He reminds me of Lieutenant Columbo..... Real goof ball who doesn't have much to add and then makes a side comments that are real gems.

++++++1

I worked for IBM for 10 years. If IBM is entrenched in large corporations around the world and growing in emerging markets, so is Microsoft, perhaps more so. Even though I am a big IBM fan, I believe MSFT is a better value than IBM at this stage. If we ever get IP protection in China, MSFT so do exceedingly well just off official sales in China versus the current rampant piracy.

+1

By EU, do you mean the Euro ? Greece will be out of the Euro but still in EU. e.g. UK.

Not sure if its been brought up before but Prem means "love". As for "Watsa", I am not 100% sure but "Wat" means someone fashionable, or is dashing...."sa" means person who comes from those qualities.

congrats to the team. Site is super fast.

Dont do it Sanj. Functionality creep is dangerous to stability of site. I have a strong techy background. Investorvillage is a site used by many here and is a classic example of what can go wrong. The site has gone from bad to terrible as the owner started adding functionality and now they are in the midst of rewriting code and the site performance is exceptionally bad. Stability and Performance are paramount. ADD ONLY SMALL FUNCTIONALITY THAT IS UNLIKELY TO SCREW UP STABILITY OR PERFORMACE.

Sanj. I've got couple of IBM x335 blade servers with high speed drives if you need free hardware.

Count me in for $50-$100 as price of admission. Sanj has been beyond generous in providing this incredible educational forum, most would happily contribute. We should figure out a way where new members can do a trial "join" for say 3 months and then are asked to contribute.

I would also argue that he was a partial insider. He knew treasury was working on a plan to save the financial system from collapse. Henry even asked him what rate the TARP preferred injection used and Buffet indicated a lower rate.

sell puts at your price and continue until your puts are put to you.

Who's the lady Sanj ? You Canadians are seriously cool dudes..... http://www.guardian.co.uk/world/2011/jun/17/vancouver-riot-kiss-photograph-mystery