Marcum LLP
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Overview
Project Services
Domestic Hedge Fund Start-Up
Emerging Manager Program
Private Equity Fund Start-Up

Overview
Tax & Business
Assurance
Advisory
Alternative Investments
Real Estate


Domestic Hedge Fund Start-Up Checklist


General Procedures
  • Clarify your investment strategy and unique edge
  • Develop a business plan, including cash flow projections and a timeline for execution
  • Select external consultants: independent accountant, attorney, prime broker, fund administrator, custodian
  • Select a name for the operating entities (general partner/managing member/investment manager) and the fund(s)
  • Select members of management team (Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Compliance Officer, etc.) including outsourcing services
  • Set-up shop: banking relationships, office space, business equipment, trading accounts, staffing, IT/website, etc.
  • Structure compensation, profit sharing, and retirement plans
  • Consider disaster recovery plans
  • Purchase adequate business, life and health insurance
  • Consider forming an Advisory Board
Preparatory Steps
  • Determine legal entity, structure (onshore, offshore, parallel, master-feeder vehicles) and appropriate jurisdiction
  • Evaluate registration options and costs to assure compliance (SEC, CFTC, NFA, FINRA, etc.)
    • Blue sky laws
    • Potential regulatory changes
  • Determine the provisions to be included in your offering documents
    • Capital transactions
      • Subscriptions
      • Redemptions
      • Lock-up periods/gates/suspensions
    • Allocation of profits and losses
      • Incentive allocation or fee
      • High-water marks, loss carry-forwards, hurdle rates and claw-back clauses
      • Side pockets
      • New issues
    • Management fee
    • Portfolio Valuation
  • Determine the year-end tax reporting needs
  • Consider for tax purposes
    • Aggregate vs. layering approaches for maintaining records
    • Trader vs. investor
    • Section 475 election
  • Establish compliance, risk and valuation guidelines
Document Review
  • Prepare and review with appropriate parties
    • Offering Memorandum
    • Subscription Agreement
    • Partnership Agreement
    • Prime Brokerage Agreements
    • ISDA Agreements
    • Custody Agreements
    • Counterparty Risk Agreements
    • Compliance, Risk and Valuation Guidelines and Manuals
    • Due Diligence Questionnaire
    • Marketing and Website Materials
Private Investment Forum

Contacts
Melville, NY
631.414.4230
Contacts
Irvine, CA
949.236.5618
Irvine, CA
949.236.5670
San Francisco, CA
949.236.5622
Contacts
West Palm Beach, FL
561.653.7330
West Palm Beach, FL
561.653.7310
Contacts
Boston, MA
617.807.5150
Boston, MA
617.807.5060
Contacts
Melville, NY
631.414.4520
Melville, NY
631.414.4414
New York City, NY
212.485.5760
Melville, NY
631.414.4256
New York City, NY
212.485.5510
Contacts
Philadelphia, PA
484.270.2550

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