123 41th Avenue West
Vancouver, British Columbia, V1V 1V1
Phone: 123.456.7890 ABS
CONSULTANTS
September 28, 2011
Mr. James Dimon, CEO
J.P. Morgan Chase & Co.
270 Park Avenue,
New York, NY 10017
Subject: New market for hedge funds
Dear Mr. Dimon:
It is a pleasure for ABS Consultants to be working with J.P. Morgan Chase & Co. As follow-up to our initial conversations, we have considered various trends occurring within the financial arena, and have identified one trend specifically within the space of alternate investments that would most benefit your firm. The concept underlying this trend is the lack of accessibility to hedge funds for non-accredited retail
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The first is derived from the partnership structure. To withdraw money from a hedge fund, dependent on the fund, this can take anywhere from weeks to months: this being a result of having do legally deregister the investor as a partner, and pertinent to large investors, measures have to be taken to ensure the withdrawal of capital does not affect the strategy’s profit earning potential for other investors. The second downside resulting from the 499-partner constraint, is that well-performing hedge funds often have investment minimums in excess of $1 million3. The third disadvantage of hedge funds is their confinement by the SEC to seek new investors solely through word of mouth.
Where the opportunity lies
In examining hedge fund structure, we quickly recognize its primary limitation: exclusivity through the accredited investor clause. This clause states that for a hedge fund to avoid the basic limitations of other more traditional fund structures, retail investors must have a thorough understanding of the investment profile of the fund, as well as over $5 million in investible assets. For institutional investors, this number is $25 million. While this clause allows Hedge Funds to avoid registration with the SEC, it restricts the fund from accepting any non-accredited investors from investing in hedge funds. This population constitutes the vast majority of investors domestically. Furthermore, as
markets expand to less wealthy nations, we note
A: Hedge funds, historically, were more interested in the buying and short selling of defaulted or near-default bonds within a few weeks or months. This strategy was more of a short-term, exit-focused strategy. Now, however, some hedge funds are becoming more interested in the restructuring and long-term controlling of attractive assets. Hedge funds’ stakes in these companies are then transformed into equity from the arising new entity. Private equity is split up into Venture Capital and Leveraged Buyout funds, with a little made up of
The topic of activist hedge funds, and the freedom in which they are allowed to target companies has risen a lot of concern amongst politicians, CEOs and the American public. Thus, the proposed rule has attracted a lot of attention and many comments, either for or against the rule.
In this unwelcome role, hedge funds are prey to heightened scrutiny, not only from the media, but also from the Department of Justice, the Securities and Exchange Commission and the
As long ago as 1999, an independent investigator, Harry Markopolos, concluded that Madoff’s success could not be legitimate. In 1995, he sent the US Securities and Exchange Commission a 17 page document titled: “The World’s Largest Hedge Fund Is a Fraud”. Two years later the SEC found no evidence of fraud after an investigation that seems to only involve just a little more effort than simply asking Madoff if he was a criminal or not, and then excepting his answer.
This chapter does not only focus on types of assistive technologies that support writing but it also goes into great depths in regards to many different aspects of writing that, on their own or together, can be frustrating for students. The text outlines 3 different elements of writing and these are the task environment, long-term memory and the writing process (prewriting, drafting, reviewing, editing and publishing.)
Hedge funds originated in the late 1940s, and they have been causing problems in the US economy since then. Due to the fact that hedge funds basically function on loopholes in American laws, it simply creates a way for the rich to become richer and the poor to become poorer. An example of this is the way that hedge funds are structured to avoid regulation by the Securities and Exchange Commission (SEC), the “federal regulator of securities markets” (Investopedia) in the United States. Hedge funds are able to exempt themselves from the Investment Company Act of 1940, an act put in place by the SEC that imposes limits on the use of certain investment techniques, by having “less than 100 investors” (Fichtner 8) or making sure that investors are
Citadel ranks as the eleventh largest hedge fund manager in the world. The funds from investment strategies like credit, fixed income, quantitative strategies, commodities and equities are managed by Citadel. This company has a strong risk management culture and state of art technology. From 2009-2010 the funds capped solid returns with more than 20% of gains. Citadel became first foreign hedge fund to complete Yuan fundraising that allows Chinese investors to invest in overseas hedge funds.
Pension funds, institutional investors and endowments have been vocal regarding exorbitant hedge fund fee structures for years. Until recently, investors have been content to complain loudly, while quietly pocketing the gains hedge funds generated.
The composition ability deficiencies of a worker have unmistakable and non-substantial expenses. The immaterial expenses incorporate picture servility of both executive and worker, negative effect on profitability, and result of mistaken choice because of ineffectual composed material.
The second set of points starting with the sixth point. Sixth, The First Step Is Admitting It, has separate implication because it about the form over substance from market capitalization. Seventh, To Hedge or Not to Hedge ?, is that hedge fund reporting, by both the mass media and industry, is practically always wrong, but in a interestingly mixed way reliant on market direction and the preference of the analyst. His hope is that reporting and the whole hedge fund industry can improve and have a better value
In recent years, hedge fund activists have been growing in prominence around the world as a new breed of shareholder activists and the latest form of corporate governance mechanism. Hedge fund activists
Hedge funds are generally described as being private investment vehicles for wealthy, private and secluded investors, prearranged with limited partnership. Partners of most hedge funds dedicate their personal wealth into the fund to ensure personal interest and dedication to the fund. This hedge fund structure continues to be a dominant organizational setup in the financial industry. Albert Wislow Jones is known as the father of hedge funds, creating the first one in 1949 that used what is known as short-long equity strategies and leverage to thrive in the economic world. He initially raised $100,000 for the fund and $40,000 came out of his own pocket. By short selling other stocks, he originated this idea of minimizing risk. He changed
Keywords: hedge fund, hedge fund manager, hedging, mutual fund, investment, investors, loan, capital, interest, return, Ponzi scheme
These hedge funds are much less riskier than a portfolio of common stocks. These use a number of strategies. It includes trading between futures and underlying common stocks, buying and selling related classes of common stock or certain options strategies.
Institutional investors are any organizations or persons which collect quite number sums of money to invest in securities and also control a collection of share amounts to qualify for special treatment and less regulation. They can also include operating companies that decide to invest their profits to some degree in these types of assets. Insurance companies, mutual funds and pension funds are some examples of institutional investors. These institutional investors need to face some regulations. “Institutional investors always participate in private placements of securities due to their sophistication, in which certain aspects of the securities laws may be inapplicable.”