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Incubator Hedge Funds
Customer Testimonial Hannah and her team were knowledgeable, professional, and a pleasure to work with; having access to their expert help is indispensable in forming an incubator fund or hedge fund entity at a very reasonable cost and time frame. D. Rxxxn December 21, 2011
Incubator Hedge Funds An incubator hedge fund set up by us is the least expensive and most flexible hedge-fund business plan around! We can form your incubator fund for $2,000. Incubator funds cost less than fully formed hedge funds - which cost around $12,000 - because performance and management fees are not paid to the fund's investment manager and general partner. The incubator hedge fund is seeded with your own money. While periodic monthly or quarterly accounting is not necessary for an incubator fund, we offer those services as well as annual tax preparation and tax planning at competitive pricing. The advantage of our incubator fund strategy is that you generate a trading performance record now while allowing you to complete the full set up of your hedge fund later.
Your incubator fund can be set up as either a Delaware Limited Partnership (LP) or Limited Liability Company (LLC). Pro-management corporate law serves as the reason for setting up the hedge fund in Delaware. Click Here to Learn More About Delaware Company Law. The management company is best formed in your home state unless you expect to move. Even though not necessary during the incubator fund set up, we will discuss with you NFA, SEC and other registrations and licensing, as well as other matters you will face when you upgrade the incubator fund to a full-fledge hedge fund.
Read the rest of this page as it will help you connect the dots and prepare you for a free consult with us to answer any remaining questions you have may have. Click Here to Request a Free Consult We will discuss whether the incubator hedge fund it is right for you.
During the incubator fund development process you access to a veteran hedge fund and tax attorney, Hannah Terhune. She and her staff carefully guide you through the process of setting up the incubator hedge fund. The incubator hedge fund development process is relatively simple. Hannah Terhune developed this strategy in 2005 as a result of working closely with traders. She realized that an answer was needed to deal with the biggest legal frustration for 'at home' traders: not being able to use personal prior trading results as proof of their ability to successfully trade the markets.
If you have investors already wanting you to manage their money for a fee, you may want to consider an investment management agreement for separately managed accounts (which may or may not require licensing) and/or setting up a full-fledged hedge fund immediately. In the consult, we can discuss SEC, NFA or other registrations and licensing, structuring, and tax issues (i.e., the mark-to-market election, hedge fund and trader tax issues).
Incubator funds are set up quickly (one to two weeks).
Customer Testimonial Hannah and her team are experts in their field of offshore funds. The expertise and care to think ahead of all the specific issues I might have as a client are greatly appreciated. Capital Management Services Group applies a no-nonsense and straight forward business approach to a complex maze of international rules and regulations. I'm pleased to have them on my team and certainly recommend them to any professional looking for guidance in the hedge fund industry.Andre Voskuil, DutchOracle Capital Ltd. December 28, 2011
What is an incubator hedge fund? An incubator hedge fund set up by us is the least expensive and most flexible hedge-fund business plan around! Your incubator fund can be set up as either a Delaware Limited Partnership (LP) or Limited Liability Company (LLC). The management company is best formed in your home state unless you expect to move. Even though not necessary during the incubator fund set up, we will discuss with you NFA, SEC and other registrations and licensing, as well as other matters you will face when you upgrade the incubator fund to a full-fledge hedge fund.
An incubator hedge fund is a startup fund that allows you to trade your own assets and document your ability to trade the markets in real time. You contribute capital to the incubator fund and manage it to develop a trading record. When a successful trading record is established, you can convert incubator hedge fund to a full-fledged hedge fund. At that point, you can allow third party investors in to the fund.
Offshore incubator hedge funds are more flexible that those set up in the United States. Click Here to Learn More About Offshore Funds and Offshore Incubator Funds What types of incubator hedge funds are available? There are many different types of incubator hedge funds. An incubator hedge fund can be started for any specific strategy. It should mirror the investment program to be used in the future to trade customer money.
One common type of incubator fund is a forex incubator hedge fund. In the forex incubator hedge fund the manager will trade in the off-exchange foreign currency markets, which is now regulated by the NFA. Click Here to Learn More About Forex Funds and Forex Incubator Funds
Customer Testimonial I would like to state unequivocally that I have had a completely positive experience in dealing with Capital Management Services Group. Truly, from the first phone call that I made to Capital Management, to the conference call that was arranged with Hannah Terhune, the time she took in answering all of my questions, and, finally, to the follow-up by Amy Hong. My case involved the establishment of a Forex Incubator Fund, and was thoroughly handled. Hannah Terhune responded promptly to my subsequent phone calls and Amy Hong is absolutely 100% efficient. I, certainly, plan to enlist Capital Management's services for my legal needs in the future concerning fund management. I would rate my experience and results 5 out of 5 stars! Totally satisfied, Rxxxxxx Sxxxx, Sept.22, 2010
How long do I have to operate an incubator fund before marketing the fund to investors? Incubator hedge funds you to create solid track records within the structure of a real hedge fund. The incubator hedge fund assets are managed about 6 to 18 months. Ultimately, there are no hard and fast rules. It is our experience that fund managers typically incubate their hedge funds for a short period of time and then convert the fund to a full-fledged hedge fund. The better the track record, the more attractive the investment will appear to prospective investors. If investors are ready to go, why wait? Set up the full-fledged hedge fund.
Can I have outside investors in an incubator hedge fund? Yes, in many cases. The answer depends on where you are based and some other factors.
Can I have multiple incubator hedge funds? Yes. Can I begin to gather indications of interest from potential investors during the incubation phase? Yes. Performance information about the incubator hedge fund can be provided to preexisting and potential contacts at any point after the fund?s inception. Although you cannot accept capital from outside investors during the incubation period, you can gather indications of interest through your personal network, friends and family (i.e., persons with whom you have a pre-existing relationship). Marketing the fund through general advertising or general solicitation is prohibited. How much does it cost to establish an incubator fund? One of the primary catalysts for the growing popularity of the incubator fund is its cost effectiveness. It is a low cost project.
Customer Testimonial Hannah Terhune and her team are always available and ready to work with you, with a nice attitude and assisting in a very professional way. Their wide spectrum of services and knowledge really make a difference when you look for consulting. jxxxxxx August 10 2010
How is an incubator hedge fund structured? An incubator hedge fund in the United States is formed with two entities: (1) a limited partnership (LP) or a limited liability company (LLC) to serve as the hedge fund; and (2) a second entity to serve as the investment manager of the fund. Outside the United States, an incubator hedge fund is formed with one entity.
Can I open a trading account for my incubator fund at any brokerage firm? Yes. As soon as the hedge fund is formed you can open a brokerage account and begin trading. We will obtain the EIN (tax identification number) of the fund and draft any banking and brokerage resolutions you need at no extra cost to you. Can I add or withdraw capital from the incubator fund; will it affect the track record? Yes. The track record of the fund is measured as the percentage return of assets under management, regardless of the amount of capital contributed to or withdrawn from the fund.
Do I need an administrator during the incubator fund period? No. You do not need to buy accounting services to start and run an incubator fund. Postponing the need to hire an administrator is another advantage of initially establishing an incubator fund. Administrators are helpful with the support of a full-fledged hedge fund (e.g., providing net asset value calculations, preparing monthly reports, and calculating fees).
Should I set up an offshore incubator hedge fund? The answer depends on your goals and where you are from. Offshore the rules are more relaxed. If your prospective investors will likely be from outside your home country or are U.S. tax-exempt, establish an offshore incubator fund.
Can I submit data to hedge fund databases while I am operating the incubator fund? Yes.
How are incubator hedge funds taxed? The U.S. incubator fund is taxed as a pass-through entity for U.S. tax purposes. This means that the incubator fund's realized gains and losses are taxed at the investor level. The tax character of the gains and losses pass through to the investor level as well.
Caveat: if you skip forming the investment management company or do not make the correct tax election for the management company, you cannot have the correct tax status for the incubator hedge fund in the United States. Offshore incubator funds are generally set up as corporations and are viewed as such for U.S. tax purposes, unless a tax election is filed on IRS Form 8832 to have the offshore fund taxed as a U.S. partnership.
Presenting Past Trading Results One reason why active traders do not realize their dream of starting a fund is that they do not have a track record. Unless you are known as a successful trader and have a professional pedigree, you may not be able to attract investors into your fund until you can show them a performance record. For successful active traders like you, this is annoying.
If you are planning to start a fund you probably experienced success trading your own accounts or trading professionally. Securities laws make it difficult and expensive to use your prior performance records to promote a new venture. Although a trader may have substantial experience trading, he may not have marketable quantified measures of his trading success to attract potential investors to a fund.
Our incubator hedge fund strategy is a proven solution to your lack of credentials in the industry. By setting up an incubator hedge fund and following our protocols you can create a performance record that can be marketed and shared with prospective investors and clients. Only when you are sure that investors will come aboard your fund, Hannah Terhune, veteran hedge fund attorney, will held you upgrade your incubator fund to a full-fledged hedge fund. Call us for a free Consult!
Customer Testimonial I wanted to thank you and your staff for the professional and timely services that you provided in setting up a CTA business. As an individual trader for almost 20 years I have a full grasp of markets but had very little knowledge in setting up a trading business for clients. Everyone at your firm was extremely friendlyand helpful in giving me guidance in this new startup. Your prices were fair and while I looked at different firms to handle the process yours was head and shoulders above the rest. Thanks so much, Sxxx Sxxxr Managing Partner Sxxxxx Capital Management LLC. June 18, 2010
Do I need to form a management company? Yes. You cannot be the general partner and initial limited partner as an individual and obtain the desired tax treatment of the incubator hedge fund. Do I need any licenses or registrations to operate an incubator fund? No. Can I operate more than one incubator fund? Yes. Some managers will incubate multiple funds in order to develop track records for different strategies. How much money do I need to seed the incubator fund? There is no minimum investment amount. You are just trying to create a performance percentage based on real time trading.
Can I seed the incubator fund with my IRA? Yes. You need an IRA custodian that will allow you to do so. Find a very flexible custodian and you will probably need to form a separate special purpose LLC to facilitate your IRA's investment into your incubator fund. If you use margin to trade, do not use your IRA or set up the incubator offshore to avoid tax problems. This is a complex approach so please call us for a free consult to avoid making any mistakes!
Customer Testimonial I have had the fortune of working with Hannah Terhune and Capital Management Services on the setup of my hedge fund. As a well funded start up with offshore and onshore investors I needed someone who could help me and my investors navigate the complex tax, regulatory and set up requirements. Her firm supported us each step of the way and we were incredibly impressed with her knowledge, experience and execution. What could have been a very difficult and lengthy process was seamless, well managed and cost effective. We will continue to use Hannah as we grow our assets and would have no hesitation in recommending her to both start up and established managers. Thanks. Warren January 26, 2010
Can I have outside investors in my incubator hedge fund? Yes, in the United States in some cases. You cannot charge performance and management fees if you are based in one of the states where investment adviser registration is required. As a result of broad U.S. law changes in 2011, we do not suggest you allow friends and family members in your incubator fund unless you first check with your home states securities board--even if you trade spot forex or management futures. The regulatory landscape has changed dramatically.
What if I already have investors lined up? If you have investors waiting in the wings, skip the incubator fund and set up the full version of the fund. If you do not have investors lined up, you may find the incubator fund strategy more compelling. What if I change my plans? If you decide not to complete the fund you can still benefit from the entities formed as they can be adapted for other business ventures. You can use them to generate earned income to fund tax efficient retirement and health insurance plans. Our Plan B Approach allows you to realize maximum value for your dollars or Euros spent with us. You have a chance to learn about running a fund without investor pressure.
How do I transition an incubator fund to a full-fledged hedge fund? With the existing entities already in place and a marketable track record to show potential investors, transitioning your incubator fund to a full-fledged fund is usually a straightforward process. Once you are ready to launch the fund, you should consult legal counsel regarding the preparation of formal offering documents for the fund, which will include a private offering memorandum, partnership agreement, and subscription documents. You may also need to engage additional service providers, such as a third-party administrator, prior to launching a full-fledged hedge fund.
Customer Testimonial Hannah: You and your team delivered what you promised--on time and on budget. You all were were attentive and professional in every respect, and I appreciate your effort, advice and guidance very much. It was a pleasure working with you, and I would recommend you to others without reservation.Best Regards, PB. January 18, 2010
Is your broker giving you legal advice? Leading retail brokerages are giving so-called "legal" advice to traders interested in managing "friends and family" brokerage accounts for management and performance fees. We hear reports of the widespread use of these informal "friends and family account" arrangements and are extremely concerned.
Let's face it: your brokerage firm is focused on opening accounts, getting your money in the door, and generating brokerage commissions from your trades. Your brokerage firm is not in the business of giving you balanced, accurate, and binding written legal advice.
Your brokerage firm could care less about you on the day you receive a phone call or letter from the SEC, stating your trading activities are under investigation.
Friends and family members do complain to the state regulators when money is lost in their trading accounts. Your brokerage firm will not help you defend your "informal" investment advisory arrangements (no matter what they have told you on the phone).
If you lose money belonging to your friends and family members, you will face the state regulators all alone. You are liable to prosecution under the state and federal securities law. Using your brokerage's "Power of Attorney Agreement" to gain access to trade a third party brokerage account and receive management and performance fees protects the broker and not you. Just because your broker opened a master trading account and gave you a "Power of Attorney Agreement" to use with your "clients" doesn't mean you are in the clear when the state regulators show up at your door. You need to be certain that you are in compliance with the applicable state and federal securities law that apply to your "friends and family" investment advisory business.
Brokers Skirting the Rules Sadly, there are dual registered brokers/investment advisors using retail "Friends and Family Accounts" to manage money on the side so that they do not have to report the activities to the brokerage carrying their FINRA licenses. This of course is another disturbing trend. Don't take unnecessary chances with your future. Start by speaking to Hannah Terhune, an experienced securities law attorney.
Why Hire Us? Advising individuals on hedge fund startups worldwide, we are experts on investment adviser laws, hedge fund laws and regulations, forex fund regulations, and managed futures regulations.Our expertise extends to a wide variety of services, including state investment adviser registratoins, SEC investment adviser registrations, U.S. hedge fund formations, foreign hedge fund formations, forex fund startups, and managed futures fund startups. Additionally, we handle commodity pool formations, NFA registrations, cross border business planning, and investment manager regsitration in numerous vountries.
More Reasons to Hire Us When you engage us for hedge fund you get a unique combination of securities, tax, and international experience, focused on the trader niche. We have established a leadership position with traders. We are one destination for all your very special hedge fund and trader tax needs. We think we have the best set of offering documents based on the current and ever changing federal, state and offshore securities, commodities, and tax laws. We aim and deliver quick turnaround times, because we understand that our customers want to begin their money management business as soon as possible. We conceive, structure, and deploy the best tax saving strategies into your hedge fund vehicle (for the benefit of the manager and their investors) and your management company. Investors value tax-savings strategies and we utilize all our special knowledge and ideas in this area. Our customers value our one-stop relationship. We will help you start your business and continue to assist you. Our tax services division handles accounting, software, and tax compliance, including all tax matters (tax planning and tax returns). Only one thing counts with us and that's our customer relationships!
CapitalManagementServicesGroup.com is recognized by discriminating fund managers and traders as being the foremost tax and legal authority in the business. Attorney Hannah Terhune's education and experience are unsurpassed in the area of hedge funds creation and management platforms, and the complex body of tax laws related thereto. Ms. Terhune's exensive knowledge and experience have made her an indispensable resource for serious fund management and trading professionals. Ms. Terhune's articles on the subjects have appeared in over 100 publications worldwide. Chances are, if you have read about the above matters, Ms. Terhune has written about them. Give us the opportunity to use that knowledge and experience for you. CMSG provides the best services and support needed for hedge fund projects and associated activities in one convenient place, saving you time and energy. No need to coordinate work between different firms; we handle the entire process from start to finish. We offer hedge fund and money management accounting, tax services, tax preparation, consulting, entity and retirement plan formation services. Our professionals provide the highest quality services at competitive rates. But don't take our word for it, give us a call and let us prove what we can do for you. Read our Customer Testimonials and learn more About Us.
Personal Consultations and Fees You get answers to your specific questions by speaking directly to Hannah Terhune, an experienced hedge fund attorney. Ms. Terhune's hard-earned knowledge and experience can be put to work to save you unnecessary steps and costly wasted effort. The consult is an invaluable opportunity to speak to Hannah one-on-one, and learn how to achieve more in less time. As a result, you can anticipate that the return on your investment will far outweigh the costs associated with our unsurpassed services. Of course, fees are a necessary part of the consultation. Ms. Terhune's credentials reflect an invaluable resource that combines a well-informed professional practitioner with sound ethical judgment that cannot be over-estimated. The expertise required to recommend best solutions and provide sound advice should never be taken lightly. We are confident that when you are finished with your consultation, you will be impressed and more informed about your business plans than ever before. Call (307) 213-4732 or Click Here to Request Services.
Our Commitment Henry David Thoreau wrote: "Do not hire a man who works for money, but him who does it for love of it." We are committed to your business plans and bringing you the best possible options. We are an established and internationally recognized business that serves and educates our clients throughout the industry. We do this by striving for the best results. Above all, we are a law firm. A lawyer is a philosopher and role model. The ability to improve our clients' lives is a privilege that we do not take lightly. There is tremendous power in being able to effect a positive change in our clients' lives. Our aim is to welcome our clients and to provide a comfortable, warm environment for all. We believe that making our clients feel comfortable and confident with the process provides the basis for a constructive relationship built on mutual trust. time. Thanks for visiting our website. We hope to have the opportunity to serve you.
