Hedge Fund Private Placement Memorandum
Prospectus.com’s team can draft your hedge fund Private Placement Memorandum for virtually any jurisdiction worldwide. We are considered to be the most efficient (faster), cost effective (save money) and proficient firm (better than others) globally.
Our team can prepare and assist in the filing of all paperwork with regulators and help to launch the fund. Our industry leading firm specializes in hedge fund setup and document drafting for nearly all paperwork, including the offering memorandum and the private placement memorandum and prospectus, as required. We write hedge fund Private Placement Memorandum for various onshore and offshore jurisdictions and for numerous hedge fund offerings for limited partnerships (LP or LLLP), LLCs (limited liability companies, open ended and closed ended funds, UCITS and umbrella structure and more.
Our hedge fund documents are industry standard and utilized by hundreds of funds and law firms.
Some of the details of our hedge fund Private Placement Memorandum and offering memorandum are the following:
|* Good for LP or LLLP Hedge Fund Private Placement Memorandum
* Good for LLC Hedge Fund Private Placement Memorandum
* Includes Hedge Fund Investor Questionnaire
|* Exemption under Section 3(c)(1) of the Act
* Includes Hedge Fund Term Sheet* Industry Standard Format
* Includes updated SEC Accredited Investors Rules
Hedge Fund Definition
Hedge funds typically borrow money and reinvest the capital in short term and sometimes risky securities. Hedge funds are normally a limited partnership structure, such an LP, and they can be onshore, such as in the United States or China, or offshore in places like the Cayman Islands and Bermuda and many other jurisdictions. Investors are often diverse and strategies employed by such funds, such as “hedging” an investment is commonplace. Often the positioning of hedge funds is short or long and depending on the scenario, the dollar or Euro amount invested, profit margins can be high (and of course one can lose their entire investment).
Hedge Fund Structure
Often, hedge funds are most often set up as a limited partnership (usually referred to as a ‘private investment partnership’ or LP or LLP). As a private investment partnership, hedge funds are not permitted to have an unlimited amount of investors and therefore the offering (typically conducted via a Private Placement Memorandum for a private placement or a private placement memorandum or offering memorandum for the hedge fund) will limit the number of investors. In order to offset the negative implications of having ‘few’ investors, the hedge fund, in the hedge fund Private Placement Memorandum, will state that it is only allowed to have investors buy in for a ‘large’ investment. Example: if a hedge fund in its offering memorandum is seeking $100 million in capital, they may have a million dollar minimum buy in or higher. Additionally, investing in a hedge fund also implies that the investment is illiquid. This means that one’s investment will remain in the company for a ‘long’ period of time, such as one year, without having the ability to take one’s money out.
Sophisticated Investors for a Hedge Fund Private Placement
In general, hedge funds are basically unregulated. This unregulated industry is mostly because hedge funds seek out to what is known as a “sophisticated investors”. For American investors in hedge funds, it is required the any investor be “accredited” while in Europe it may be called “experienced investors”. Accredited investors must have a certain net worth (this net worth standard was updated in July 2010 by the financial overhaul bill that went through and was approved by the US Congress) while sophisticated investors must have experience and knowledge of investing. In additional from an accredited investor having a certain amount of net worth, they must also possess investment knowledge. Hedge funds ‘hedge’, which basically means they attempted to maximize profit while reducing risk and doing this faster than, say, a mutual fund, which has a longer term view for investment. Therefore, investors must have knowledge of the general industry. Our team ensures that all hedge fund Private Placement Memorandum we draft encapsulates the accredited, sophisticated or experienced investor criteria standards
Prospectus.com’s team has years of writing and working with hedge funds from across the globe. We write investor ready hedge fund Private Placement Memorandum documents for funds seeking to offer an investment opportunity in the hedge fund world.