Investor Q&A
6. Does Hedge Fund Launch, LLC have a proprietary database of start up hedge funds?
7. Can I license Hedge Fund Launch, LLC's proprietary database of start up hedge funds?
Q1: How much due diligence does Hedge Fund Launch, LLC conduct on the start up hedge fund managers in the hedgefundlaunch.com database and will all of that be shared with me?
A1: Hedge Fund Launch, LLC does not perform due diligence on hedge fund managers that choose to list their hedge funds in the database. The managers are queried for certain information during the registration process and the results from this are placed in the database.
Q2: As a potential provider of seed capital, what are my advantages in investing with a start up hedge fund at its inception? Isn't it prudent to wait until the manager has a track record before investing with them?
A2: Seed capital investments in hedge funds offer several advantages including the possibility of an equity stake in the ongoing operations of the fund, capacity rights, fee discounts/rebates, and statistically proven out performance associated with the formative years of a new hedge fund operation.
While investing in a hedge fund with a track record may offer perceived safety, there is still no guarantee that the fund will be a success. Furthermore, funds with longer, successful track records are limited in capacity, tend to have higher fees, and typically offer unfavorable liquidity provisions. Additionally, research has shown that hedge fund managers further along in their life cycle, and with limited or no capacity, are apt to experience a leveling off and/or decline in performance.
Q3: What kind of experience does Hedge Fund Launch, LLC suggest seed capital investors look for in start up hedge fund managers? Can you elaborate?
A3: Hedge Fund Launch does not provide consulting services to investors. We strongly suggest that each investor find a deal that best suits their specific objectives and constraints.
Q4: As a potential seed capital investor, what happens to my investment if the hedge fund I invest in goes out of business?
A4: The basic structure of a seed capital investment in a hedge fund is similar to the structure of a venture capital investment. As such, there is a risk of 100% capital loss. This risk, however, also exists in a plain-vanilla limited partnership interest in an established hedge fund, without equity kickers (e.g., Maricopa, Manhattan Fund, etc.).
Q5: I am interested in possibly providing seed capital to a start up hedge fund manager, what services does Hedge Fund Launch, LLC offer to investors like me?
A5: Hedge Fund Launch LLC does not offer consulting services to investors.
Q6: Does Hedge Fund Launch, LLC have a proprietary database of start up hedge funds?
A6: Yes. One of Hedge Fund Launch, LLC’s new services will be a database of start up and emerging hedge funds. We will be announcing this in the near future.
Q7: Can I license Hedge Fund Launch, LLC's proprietary database of start up hedge funds?
A7: Yes, we license our database of start up hedge funds. Please click on the following link to learn more. . . .