basic hedge fund info needed

[btmagnetw]

i have 0 knowledge about hedge funds but am in need of some. google and wiki are giving a lot of general information about what they are but i need some more specific info.

among what i need to know are:
what are carry charges? what is aggregate carry?
is your interest solely calculated based on your contributions? how does withdrawal work?
are hedge funds usually set up as partnerships? how is setting one up as a corporation different?

if you have the answer to any of these i'd appreciate it. if you know a link that explains some of the more complex issues, that would help too.

[DcifrThs]

[ QUOTE ]
i have 0 knowledge about hedge funds but am in need of some. google and wiki are giving a lot of general information about what they are but i need some more specific info.

among what i need to know are:
what are carry charges? what is aggregate carry?
is your interest solely calculated based on your contributions? how does withdrawal work?
are hedge funds usually set up as partnerships? how is setting one up as a corporation different?

if you have the answer to any of these i'd appreciate it. if you know a link that explains some of the more complex issues, that would help too.

[/ QUOTE ]

what is your perspective? are you looking to invest in one?

i worked for one of the biggest & i've never heard of a carry charge, nor aggregate carry.

if by "interest" you mean "equity," then yes, you are, at least at my old fund, sold shares of an offshore fund (vehicle) valued at a certain rate. you gain exposure to the fund via those shares and they pay the returns that the fund generates.

withdrawal is 100% dependent upon the fund. a "lockup" is the minimum time for which your investment must remain in teh fund. i don't know how funds w/ a lockup deal with returns (i.e. if you invest $100 and earn 50% for 2 years, can you take out all of your earnings back down to the initial $100 level?). my old fund had no lockup & you could withdraw at any point in time (but need like a few weeks to sort out paperwork & get the money back via the custodian)

i don't know about aggregate hedge fund statistics. i.e. what % are partnerships vs. corporations etc. i could guess though that smaller ones are likely to be partnerships & bigger ones corporations. the difference is probably how distribution of equity is handled, though i'm not well versed in this area.

again though, why do you need this info? some context may increase the accuracy & helpfulness of the responses you get.

Barron

[btmagnetw]

researching to prepare myself for a work project.

does carry = carryover? does that make any sense?

here it is in context:

Company ABC is a hedge fund, set up as an LP. Company XYZ is an LLC, which is the general partner of Company ABC. Company XYZ bears expenses, and charges a 2% mangagmenet fee as well as a 20% carry.

[hawk59]

'carry' is referring to the performance fee that a fund charges. typically 20% of profit, so if you have a fund that has $10mm under management and has a 10% return in one year, then there is $1mm in profit, and the 'carry' is $200k.

as far as i know they are always set up as partnerships.

[icetonez]

I don't know much about hedge funds, but in that context it sounds like carry is a % of profits above a benchmark.

[DcifrThs]

[ QUOTE ]
researching to prepare myself for a work project.

does carry = carryover? does that make any sense?

here it is in context:

Company ABC is a hedge fund, set up as an LP. Company XYZ is an LLC, which is the general partner of Company ABC. Company XYZ bears expenses, and charges a 2% mangagmenet fee as well as a 20% carry.

[/ QUOTE ]


yea that is wierd that they say it is a "carry" rather than just a standard "2 and 20."

i guess i misunderstood the structure question. the fund in which investors put their money may be a partnership, however the management company is definitely a corporation.

Barron

[DespotInExile]

[ QUOTE ]
that is wierd that they say it is a "carry" rather than just a standard "2 and 20."

[/ QUOTE ]

"Carry" is frequently used as a noun also, as in, "Does your comp include carry?" ie., participation in the carried interest that the fund charges to investors.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
that is wierd that they say it is a "carry" rather than just a standard "2 and 20."

[/ QUOTE ]

"Carry" is frequently used as a noun also, as in, "Does your comp include carry?" ie., participation in the carried interest that the fund charges to investors.

[/ QUOTE ]

gotcha, it makes sense when you say "carried interest"

i didn't put those two together. i was thinking carry trade or interest carry.

Barron