Want to launch a hedge fund quickly and efficiently? The "Hedge Fund in a Box" solution simplifies the process by offering ready-made plans for fund setup, administration, compliance, and operations. Whether you’re starting a domestic fund, managing cryptocurrency assets, or running a listed fund, there’s a tailored plan for your needs.
Key Takeaways:
- Plans Available: Standard (Emerging), Crypto, and Listed Funds.
- Setup Speed: Up to 400% faster than traditional methods.
- Costs: Starting at $20,000 annually for basic plans, with one-time fees ranging from $10,000 to $50,000+.
Quick Comparison:
| Plan Type | Best For | Annual Cost | Key Features |
|---|---|---|---|
| Standard Plan | New domestic fund managers | $20,000+ | Entity setup, compliance, NAV tracking, U.S. focus. |
| Crypto Plan | Cryptocurrency fund managers | Varies | Blockchain asset valuation, crypto-specific compliance tools. |
| Listed Funds | Institutional and public funds | Varies | Real-time NAV updates, multi-jurisdictional support, exchange reporting. |
Choose the right plan based on your fund type, operational needs, and budget. Keep reading for a deeper dive into features, benefits, and limitations.
How to Start a Hedge Fund – A CEO’s Guide
1. Standard Plan Features
The Standard (Emerging Fund) Plan is designed to support the essential operations of a fund. It includes services across three main categories:
Entity Formation and Documentation
- Formation of U.S. fund, manager, and GP entities
- EIN registration and registered agent services
- Complete offering documents (PPM, operating agreement, subscription agreement)
- Access to a digital subscription platform
Administration and Compliance
- NAV calculations and performance tracking
- Management and performance fee calculations
- Investor KYC/AML processing
- Regulatory filings (Form D, Form ID, Form ADV)
- Ongoing blue sky filing support
Technology and Operations
- Manager portal with performance analytics
- CRM system to assist with fundraising
- Secure data room for document sharing
- Investor portal for NAV access
- Digital contribution and withdrawal management
- Integration with up to two brokerage accounts
Customization Options
The Standard Plan includes flexibility for fund customization, as shown below:
| Feature | Capacity |
|---|---|
| Share Classes | Up to 2 |
| Brokerage Integration | Up to 2 accounts |
| Side Pockets | Supported |
| Fund Customization | Extensive |
| Client Support | Essential |
Exclusions
The following services are not included in the Standard Plan:
- Offshore entity formation (e.g., Cayman/BVI)
- Tax form preparation
- Annual audits
- Counsel of record services
- Blue sky filing fees (charged separately)
This plan is ideal for domestic fund managers launching their first fund. It balances affordability with a professional-grade infrastructure, focusing on U.S.-based operations without the added complexity of international structures.
2. Crypto Plan Features
Charter Group Fund Administration’s Crypto Plan builds on the foundation of our Standard Plan, offering tailored support for cryptocurrency funds. This plan is designed to meet the specific challenges of managing digital assets while seamlessly integrating with our broader fund administration services.
Here’s what it includes:
- Blockchain Asset Valuation: A dedicated system to accurately assess the value of digital assets.
- Fee Structure Management: A streamlined approach to handling administration fees, specifically designed for cryptocurrency operations.
- Fiduciary Network Integration: Access to a strong fiduciary network to ensure proper oversight and governance in an ever-changing regulatory landscape.
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3. Listed Funds Plan Features
The Listed Funds Plan is designed to meet the needs of public market funds, addressing both regulatory and operational requirements.
Core Accounting and Reporting
This plan provides automated NTA (Net Tangible Assets) and NAV (Net Asset Value) calculations. It ensures precise accounting records are maintained and updates are sent to exchanges, promoting transparency and compliance with listing standards.
Regulatory Compliance Framework
The system aligns with the SEC‘s updated Qualified Client Test, which, as of August 16, 2021, raised the assets-under-management threshold to $1,100,000 (previously $1,000,000) and the net worth requirement to $2,200,000 (previously $2,100,000). It also supports SEC registration for funds exceeding $150 million in assets under management, handles state filings, verifies accredited investor status, and complies with exchange reporting rules.
Partnership Network
The plan integrates with trusted registry and custody partners to ensure secure asset management and smooth transaction processing.
Advanced Features
Includes real-time updates for NTA and NAV, built-in compliance monitoring, and support for multi-jurisdictional operations, including offshore activities.
Benefits and Limitations
This section highlights the main advantages and challenges of hedge fund administration solutions, building on the detailed plan features discussed earlier.
- Customization Options
Customization levels differ across plans. Here’s a breakdown of key feature variations:
| Feature | Standard Plan | Crypto Plan | Listed Funds Plan |
|---|---|---|---|
| Share Classes | 2 | Unlimited | Unlimited |
| Brokerage Integration | Up to 2 | Unlimited | Unlimited |
| Side Pockets | Yes | Yes | Yes |
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Compliance Tools
Modern fund administration platforms include tools to handle regulatory requirements efficiently. These solutions often automate filings and manage ongoing obligations like blue sky laws. Offshore funds, in particular, require compliance measures tailored to their unique needs. -
Operational Advantages
Each plan is designed to improve operations, catering to various fund sizes and complexities. These improvements often lead to better cost management and operational efficiency. -
Cost Factors
Basic solutions are more budget-friendly, while advanced platforms come with higher costs due to their expanded features. Choosing the right platform involves balancing upfront affordability with the ability to scale over time. -
Scalability
Advanced platforms are built to handle growth, offering features like unlimited share classes, multiple brokerage integrations, and enhanced compliance and reporting capabilities. These features make it easier for fund managers to expand their operations. -
Technology Features
Many modern solutions use automation to provide real-time updates, automated compliance tracking, multi-jurisdictional reporting, and integrated custody networks. These tools simplify fund management and improve overall efficiency. -
Setup Challenges
While advanced features and customization options are appealing, they can make the setup process more complex. Fund managers should carefully evaluate their current needs and future growth plans when selecting a platform.
Summary and Recommendations
Here are our tailored recommendations for fund managers based on their specific needs:
For Emerging Fund Managers: The Standard Plan simplifies the process of launching and growing a fund. It allows new managers to concentrate on delivering performance while ensuring smooth operations, compliance, and investor reporting.
For Cryptocurrency Funds: The Crypto Plan is designed to tackle the unique challenges of managing digital assets. It offers specialized valuation tools and regulatory frameworks, making it easier to handle the complexities of cryptocurrency operations.
For Established and Listed Funds: The Listed Funds Plan caters to the demands of institutional operations. It provides detailed accounting, real-time NTA/NAV updates, and dependable registry and custody support, ensuring both transparency and operational efficiency.
Recommended Plans by Fund Type
| Fund Type | Recommended Plan | Best For |
|---|---|---|
| Traditional/Emerging Funds | Standard Plan | New managers and smaller fund structures |
| Digital Asset Funds | Crypto Plan | Cryptocurrency funds with specialized needs |
| Institutional/Listed Funds | Listed Funds Plan | Complex operations and institutional investors |
When choosing the right plan, consider factors like current assets under management, growth projections, operational needs, integration with existing systems, regulatory requirements, and budget constraints. These recommendations aim to simplify fund administration while addressing a wide range of operational challenges.