Capital-Raising Issues Hedge Fund Managers Must Consider

One of the greatest concerns for hedge fund managers – particularly startup managers – is raising capital and increasing assets under management, especially in difficult fundraising environments. Managers must solicit investors and raise capital in order to successfully grow their businesses, but raising capital goes beyond simply demonstrating good fund performance. Hedge fund managers must successfully market themselves, understand their competition and know what investors are seeking and how their funds can meet those needs. Participants explored these and other matters at the annual Thompson Hine hedge fund seminar. This article highlights the key points discussed by panelists, including issues relating to raising capital, entering into seeding arrangements, offering founder share classes and understanding investor needs. For coverage of prior Thompson Hine hedge fund seminars, see “Seminar Offers Insights on Organizing Alternative Mutual Funds, AIFMD, FATCA and the JOBS Act” (Dec. 5, 2013); and “Seminar Focuses on Implications for Hedge Fund Managers of the JOBS Act, Form PF and Form CPO-PQR” (Nov. 9, 2012).

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