For answers to a number of frequently asked questions on topics related to the formation and operation of hedge funds and other pooled investment vehicles, please refer to the links below. If you have further questions, please feel free to contact us to schedule a complimentary consultation.

Can a hedge fund advertise on the Internet?

Historically, hedge funds have been prohibited from conducting any public offering by Rule 502(c) of Regulation D, which prohibited all forms of general solicitation and advertising. However, the JOBS Act…

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What is a hedge fund?

Hedge funds are private investment funds known for their lightly regulated nature, use of leverage and short-selling, structural flexibility, and varied investment mandates. Hedge funds are also characterized by the…

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How does Dodd-Frank affect hedge funds?

Investment advisors, including hedge fund managers, are subject to new registration and reporting requirements as a result of changes implemented by the Dodd-Frank Wall Street Reform and Consumer Protection Act…

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How are hedge funds taxed?

Hedge funds are typically structured as limited partnerships (LPs) or limited liability companies (LLCs). Both LPs and LLCs are taxed as partnerships by default, which means that they are pass-through…

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Can hedge funds invest in illiquid assets?

Yes, hedge funds are extremely flexible vehicles and are used by investment managers to pursue strategies across many different asset classes, include liquid and illiquid investments. Hedge funds that trade…

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Who can invest in a hedge fund?

Hedge funds accept investors based on many considerations, including: wealth, sophistication, ability to absorb losses, tax status, citizenship, and more. Hedge funds must choose investors carefully because the exemption from…

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How does a hedge fund raise money?

Hedge funds raise money from individual and institutional investors who contribute capital in exchange for interests in the fund entity. Because hedge funds are generally prohibited from using any public…

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Should I set up an offshore fund structure?

Offshore funds are typically created by hedge fund managers that have an expectation of receiving significant capital contributions from investors located outside of the United States. Offshore funds are also…

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How are hedge funds structured?

The most important features of a hedge fund structure are pass-through tax treatment and limited personal liability for the managers and partners. The appropriate vehicles in the U.S. to deliver…

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