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February 25th 2011

How to start a Hedge Fund in the US 2011

Derek Adler

The hedge fund sector evolves quickly. Fortunately so do its service providers. Since 2008’s market meltdown, increasingly high calibre teams of administrators, lawyers, prime brokers and auditors have emerged to solve the day-to-day demands of managers, investors and regulators. The successful launch of a new fund, whether it is domestic or offshore, or indeed both, is dependent on selecting the appropriate structure and complying with ever-changing federal and state regulations. A manager will need more layers of support if a launch, or running an existing business, is to be successful.

The sector’s service providers consistently excel at this. Increased regulatory restrictions, and nervous investors, are making fund launches more difficult. The heavy push on independent administrators, seen in the wake of the Madoff scandal, is also likely to continue. While administrators, prime brokers and legal counsel will all share the burden of implementing regulatory requirements proposed by Dodd Frank and Basel III.The year ahead will be a challenging time for first time fund managers looking to launch under pressurised market conditions. Actively engaging in understanding what the best practices are in managing and running the operations of hedge funds, and keeping abreast of industry regulations will secure the greatest possible future for funds. Recruiting the right service provider remains essential to this process.

The journey from start-up to becoming a well established and recognised fund can be a long and challenging process. Increased regulatory restrictions and reluctant investors are making fund launches harder than ever for emergingmanagers. HFMWeek talked to Derek Adler from ifina about the launch of its new product, Primary Development Fund, and how this aims to provide a complete service package that can give start-up funds a competitive advantage with minimal costs involved.

Hedge Fund Managers Special Report on How to start a Hedge Fund in the US 2011, where they've contacted a number of people within the industry including myself to comment and debate the subject. You can read the full article by clicking here.

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