Are your Hedge Funds legally compliant with the SEC?
Yes, our funds operate under Regulation D exemptions, specifically 506(c) and 506(b). For international investors we utilize Regulation S. View our SEC Filings here.
Who typically invests in hedge funds?
Usually defined as "Accredited Investors", various institutions, corporate treasuries, endowments, fund of funds, family offices, private banks and pensions invest in hedge funds.
What is an Accredited Investor/Qualified Purchaser?
This can vary from jurisdiction to jurisdiction, depending on the investing process in question and is something that each individual should verify within their own Jurisdiction prior to investing with a hedge fund. Put simply, if you cannot afford to lose the money you invest then you should not be looking at hedge funds as a viable investment route.
What is the minimum investment?
The minimum investment varies from fund to fund. Our funds typically begin around the $2,500 mark. Established funds can have much higher minimums; $10,000,000 or more, depending on the fund and manager. The fund manager can waive the minimum at his or her sole discretion but this is usually only undertaken to accommodate serious investors who stipulate an intent to allocate substantially more than the stated minimum, depending on how this initial allocation performs.
What fee structure do most hedge funds adopt?
Hedge funds fee structures vary, dependent on jurisdiction, domicile and, most importantly, investor base. IOC's fee structure is the standard "2 and 20": a 2% management fee (% of assets) and 20% performance fee (% of profits). The 2% management fee is collected annually and the 20% performance fee is collected quarterly. Investors also receive a 25% dividend payout quarterly.
Are hedge fund returns reported before or after fees?
Most funds report their returns from previous years "net of all fees." (net of management fees and incentive/performance fees). However, some funds report gross returns or returns net of management fees but gross of incentive /performance fees. Other variations occur but, regardless of which reporting method is received, the majority of hedge funds stipulate that pre-audit figures are subject to adjustment after year end (usually a minor or nominal adjustment).
Do investors still pay fees even if the fund loses money?
The investor always pays the management fee on assets held within the fund, but performance fees are applicable only after positive performance has been achieved (even then a hurdle rate or high water mark may grant the investor exemption of performance fee payment).
What is a high water mark?
Where a hedge fund applies a high water mark to an investor's money, this means that the manager will only receive performance fees, on that particular pool of invested money, when its value is greater than its previous greatest value. Should the investment drop in value then the manager must bring it back above the previous greatest value before they can receive performance fees again.
What is a lock-up period?
This is the time period that you must hold your assets ("lock-up" your money) within a fund before they can be removed.
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