Great video. One large element not covered here for emerging managers is that you can charge performance fees on accredited investors if you manage less than $150 million. The Private Fund Adviser Exemption is a provision under the Investment Advisers Act of 1940 that exempts certain investment advisers from the requirement to register with the Securities and Exchange Commission (SEC). This exemption applies to advisers who manage private funds and have less than $150 million in assets under management (AUM) in the United States
I've been watching your videos every day since I found your channel couple of days ago. I have a couple of questions if you don't mind me asking. *how many employees and what is the monthly running cost of a small fund including all the auditing and compliance? *I remember you mentioning good fud lawyers who can do the process a lot less cheaper you said, would you mind mentioning a few. * Since I'm from Egypt I remember talking to Interactive brokers and they said as long as you have less than 35 investors or so and 50M dollars you don't need any license. * Also how much do I need as an initial amount to be up and running, I mean for lawyers, papers, regestrations...etc and all that stuff. Thanks in advance for your help, I'll go on and watch the rest of your videos, very motivating and inspiring by the way.
Under 3c1, I believe you got performance and management fees mixed up. You said you can charge management fees but not preform fees, it should be wise versa, otherwise there is no financial incentive to even setting up a fund.
Bridger is right. You can't charge accredited investors performance fees, only management fees. If you want to charge a performance fee, the investor needs to be a qualified client or qualified purchaser. That said, in a 506(b) fund, you don't need to verify their status. If they are claiming to be a qualified purchaser, they just need to check a box saying they are.
I was told something similar to what what you just stated was true. Now I'm scouring the internet. You make the investors your partners and they get whatever percentage that they agreed to from the company's profits?
The difference for Reg D is usually between 506 (b) and 506 (c). We actually have another video on those differences. Once you pick b or c, then you'll decide 3c1 or 3c7
If you chose a Reg D 506, you can then chose (b) or (c). After that you can chose a 3c1 or 3c7 exemption. We just made another video on 3c1 vs 3c7 that you can check out.
If the fund is not going to buy any US portfolio companies, does not have US investors, does it still need to follow these rules to avoid registration?
Good question, if the fund doesn't have US securities, or US investors, then no. You do not need to follow US regulations. You'll follow the regulations of the country you're involved in
Great video. One large element not covered here for emerging managers is that you can charge performance fees on accredited investors if you manage less than $150 million. The Private Fund Adviser Exemption is a provision under the Investment Advisers Act of 1940 that exempts certain investment advisers from the requirement to register with the Securities and Exchange Commission (SEC). This exemption applies to advisers who manage private funds and have less than $150 million in assets under management (AUM) in the United States
I've been watching your videos every day since I found your channel couple of days ago. I have a couple of questions if you don't mind me asking.
*how many employees and what is the monthly running cost of a small fund including all the auditing and compliance?
*I remember you mentioning good fud lawyers who can do the process a lot less cheaper you said, would you mind mentioning a few.
* Since I'm from Egypt I remember talking to Interactive brokers and they said as long as you have less than 35 investors or so and 50M dollars you don't need any license.
* Also how much do I need as an initial amount to be up and running, I mean for lawyers, papers, regestrations...etc and all that stuff.
Thanks in advance for your help, I'll go on and watch the rest of your videos, very motivating and inspiring by the way.
Under 3c1, I believe you got performance and management fees mixed up. You said you can charge management fees but not preform fees, it should be wise versa, otherwise there is no financial incentive to even setting up a fund.
That’s what I’m confused about. Are you sure he mixed it up?
Bridger is right. You can't charge accredited investors performance fees, only management fees. If you want to charge a performance fee, the investor needs to be a qualified client or qualified purchaser. That said, in a 506(b) fund, you don't need to verify their status. If they are claiming to be a qualified purchaser, they just need to check a box saying they are.
@Bridger. Can hedge funds have private placements and can it be structured like a S-corp?
I was told something similar to what what you just stated was true. Now I'm scouring the internet. You make the investors your partners and they get whatever percentage that they agreed to from the company's profits?
Thanks for the video! One question isn't it better than having a fund under Reg D Rule 506 (b) instead of 3 (c) 1?
The difference for Reg D is usually between 506 (b) and 506 (c). We actually have another video on those differences. Once you pick b or c, then you'll decide 3c1 or 3c7
To make certain I understand, when starting out is a Reg D 506 under the umbrella of 3c1 or all by itself?
If you chose a Reg D 506, you can then chose (b) or (c). After that you can chose a 3c1 or 3c7 exemption. We just made another video on 3c1 vs 3c7 that you can check out.
Thank you for digging deeper. These are great! Keep them coming!
Thanks, will do!
Can only the performance fee be charged to accredited investors in 3c1 exemption? you said you cannot charge both fees
So the Reg D is not ICA fund exemption- its an offering exemption. 3c1/3c7 is for ICA registration exemption.
Keep on posting brother you're doing society a huge favor 🙏
If the fund is not going to buy any US portfolio companies, does not have US investors, does it still need to follow these rules to avoid registration?
Good question, if the fund doesn't have US securities, or US investors, then no. You do not need to follow US regulations. You'll follow the regulations of the country you're involved in
How can i join your master mind group?
Click the link in the description
We're you able to find it? You can also jump on a call with one of our guys. Message us at bridger@investmentfundsecrets.com
great podcast !
Glad you enjoyed it!
People who short stock deserve to lose money. It’s nothing but destructive to long-term investing.
It's funny that you're explaining a short squeeze on a 3c1 vs 3c7 video -- I think everyone here knows what that is
I don’t
@@maxlarocca78 you might be looking a little far ahead