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Meet Hannah Tribune
Offering Legal, Tax, Business & Banking Services to
Hedge Funds & Fund Managers
 Worldwide
Start a Hedge Fund

We set up pooled investment vehicles ("hedge funds") in the United States, the British Virgin Islands, and the Marshall Islands.  If the United States is "offshore" to you, consider setting up your hedge fund through us in the United States.  We cater to international clients and setup funds (and fund-of-funds) for equities, real estate, bitcoin, art, crypto assets, ICOs, forex, futures and commodities.  Learn About Offshore Hedge Funds, Learn About U.S. Hedge Funds and Contact Us For Assistance

Hedge Funds The United States (USA) offers easy and low cost access to all the legal, accounting, brokerage, and regulatory services needed to start a hedge fund. Take time to learn about the “light touch” of USA regulation and low costs associated with forming a USA hedge fund. If you are based outside the United States and want to setup a USA fund, read the information provided on this web page, see See World's Favorite New Tax Haven Is the United States and Read Our Leading Media Article "American the Beautiful Tax Haven".  We will help you set up and manage your fund from within the USA as well as arrange banking and brokerage accounts. We set up equity, real estate, art, crypto infrastructure, bitcoin, venture capital, forex, futures, and commodity funds.  If you want to set up a fund anywhere else, read our website to Learn More About Offshore Funds. Continue to read our website or Contact Us!

How many investors can invest in a USA hedge fund? A Section 3(c)(1) fund is limited to 100 investors (35 of which can be non accredited investors).  Learn More About Accredited Investors  A Section 3(c)(7) fund is only open to “qualified purchasers.”  A qualified purchaser (if an individual) must have a minimum of $5 million in net investments, or (if an entity or trust) a minimum of $25 million in net investments. The advantage of a Section 3(c)(7) fund is that the number of investors is not limited under the Investment Company Act of 1940 so a fund could take up to 2000 investors before it is required to register with the SEC under the Securities and Exchange Act of 1934.  In our experience the 3(c)(7) exemption primarily is used by fund sponsors backed by institutional investors.  Contact Us for Help


USA Hedge Fund Formation To start a hedge fund, generally one sets up two entities (whether a LLC, a statutory trust, a corporation or some type of limited partnership): the hedge fund and its investment manager/management company.  However, we have set them up with one and as many as three entities. The entity for the investors should be set up in Delaware and many time the management entity is also set up in Delaware. The Statutory Trust (ST), Limited Partnership (LP) and Limited Liability Company offer pass-through tax treatment and are not subject to entity/company-level tax. Investors are taxed on their pro rata share of the fund's profits and only in accord with their home country's tax laws.  Don't make the mistake of forming your hedge fund before consulting with us.  The best legal structure for your hedge fund is dependent on a number of global tax, regulatory, and financial considerations.   Learn More About Company Formations and  Contact Us for Assistance

Delaware USA is Best for Hedge Funds & Asset Management Delaware has the best company law in the United States. It also has a Chancery Court focused solely on business matters. The legal guidance is clear and sets precedent worldwide. Set up your business in Delaware, USA.

Investment Management Company Many international fund sponsors set up a USA investment management company to minimize home country legal issues and to make their fund more attractive to investors. A typical structure is to set up the investment management company in Florida for regulatory reasons and then tier a Delaware entity above the Florida entity to benefit from Delaware law. Whether a Statutory Trust or an LLC is used, it will have operative agreements that are not published anywhere and list ownership percentages among the principals, voting rights, share class rights and other key terms principals. We not only form investment management companies but also prepare customized documents for multiple owners and passive backers, etc.  Contact Us for Assistance

Performance, Incentive & Management Fees  Hedge fund managers charge a management fee based on assets under management (AUM) and a performance fee (also called an incentive allocation, the carried interest, the performance share, etc.)tied to the hedge fund's success. Anything but a sales charge can be written in to the documents. There are numerous other fees that can be used.  Learn More About Hedge Fund Performance and Management Fees  Management fees can be charged to anyone. If you are not a state or SEC registered RIA, you most likely can charge performance fees to all of your investors.  In some cases, performance fees can be paid to a licensed investment manager only when the profits of the fund exceed a hurdle rate or on an annual basis.  We can advise you as to the permissible fee arrangements for your fund based on where you oeperate from "on paper". SEC registered hedge fund managers can charge performance fees (i.e., the carried interest or performance allocation) only to USA “qualified clients” and if the client is not from the USA, to anyone.  Learn More About SEC RIAs and Learn More About Qualified Clients This rule also applies in some states to state registered investment advisers (RIA) but not all.  Learn More About State RIA  Be certain that your expectations about charging performance fees and other types of fees are correct. Contact Us for Assistance

Investment Adviser Registration (RIA) Only hedge funds that invest in securities require a fund manager to evaluate investment adviser registration. The definition of a "security" is broad and covers investment instruments, schemes and structures. Hedge funds that invest only in commodities, futures, currencies, real estate investments, or certain private equity investments may be subject to other rules.  Hedge fund managers that advise venture capital funds are generally exempt from state or SEC RIA (registered investment adviser) registration.

A securities hedge fund manager based in the United States that manages over $150 million is required to become a SEC RIA. Learn More About SEC RIAs  In most U.S. states, a fund manager that invests in securities and has less than $150 million under management must register as a state RIA.  Some states offer an Exempt Reporting Adviser (we call it a "partial RIA license" due to its limitations) status for fund managers that operate "private" hedge funds as defined in that state's statute. Learn More About State RIA Formation and Contact Us For Help 

A reason for a foreign fund manager to consider becoming a U.S. RIA is to satisfy a brokerage and/or bank’s requirement that a hedge fund’s manager be licensed somewhere.  If your home country’s licensing requirements put investment manager licensing out of reach, consider getting licensed in the United States or in the British Virgin Islands.  Any foreign based investment manager is eligible to register with the U.S. Securities and Exchange Commission (SEC) without regard to the amount of assets under management. The SEC registration process is very simple and streamlined.  Learn More About U.S. SEC Registration


Timing a Fund Launch In general, a hedge fund takes about four (4) weeks to organize including the time needed to prepare offering documents, file SEC Form D in the EDGAR System and to arrange for the hedge fund's bank and brokerage accounts.

Fund Offering Documents (PPM) The offering documents (or shareholder agreements) are the documents that are provided to your investors and include:  (i) a private placement memorandum; (ii)  a limited partnership agreement or operating agreement (depending on whether the fund is formed as a limited partnership or LLC; and (iii)  a subscription agreement, which includes a purchaser  questionnaire to determine investor qualification.  A thoroughly prepared set of offering documents should protect you from investor claims of lack of disclosure.  Learn More About Hedge Fund Offering Documents and Contact Us For Assistance

Limited Partnership Agreement (LPA) The LPA (or in the case of an LLC-based fund, an operating agreement) is the legal governing document of your fund. It outlines the terms of the fund and the rights of an investor.

Subscription Agreement A subscription agreement (SA) provides your investors with a description of the steps necessary to invest in your fund. It requires investors to attest that they meet your fund's eligibility standards, such as being an “accredited investor” or “qualified client.” If your fund is an advertised fund under Regulation D Rule 506(c), it contains an "Accredited Investor Certification Form." Contact Us For Help 

Hedge Fund Administration There is no legal requirement in the United States to use a hedge fund administrator. However, using one is a good idea as it can reduce the cost of an audit for the fund at year end and the costs associated with the preparation of a U.S. fund's income tax return (i.e., Form 1065 and K-1s). Hedge fund administrators provide detailed net asset value statements (NAVS), performance reports, brokerage statement reconciliation, tear sheets, and much more.  Learn More About Hedge Fund Administration and Costs We offer low cost hedge fund administration services through Capital Management Administrative Services, LLC. Please see our  Sample Performance Report and Contact Us for Assistance

File SEC Form D & State Blue Sky Filings Form D is a notice of an exempt securities offering that is filed with the U.S.  SEC and discloses information about the fund and the managers. Form D is not subject to a review or approval by the SEC and must be filed within 15 days of the first sale to investors.  If your offering is ongoing, the Form D is refiled annually. Contact Us For Help Filing Form D & State Blue Sky  In addition to the U.S. SEC, each state requires Form D notification filings. Learn More About Hedge Fund Law and Learn More About SEC Form D & State Blue Sky Hedge Fund Filings

Hedge Fund Banking & Brokerage Services For either banking or brokerage services, you cannot use your personal account as the hedge fund’s account. Need help with international banking and brokerage arrangements? Contact Us for Assistance

Dealing With Non-Accredited Investors If you allow non-accredited investors to invest in a U.S. fund, you need to have an initial financial statement prepared (i.e., an initial audit).  Learn More About Hedge Fund Audits  In addition, your non-accredited investors must (alone or together with a purchaser representative) be sophisticated and have sufficient knowledge and experience in financial matters to evaluate the merits and risks of investing in your hedge fund. You will need to use a Purchaser Questionnaire in addition to the standard Subscription Agreement if you allow non-accredited investors in your fund. Contact Us For Assistance and Learn More About Hedge Fund Offering Documents

Hedge Fund Advertising  The United States allows hedge fund advertising for hedge fund's offered under Rule 506(c) of Regulation D only to accredited (and higher) investors and operated by hedge fund managers who are registered investment advisers (i.e., RIA) with either the SEC or a state.  Learn More About Hedge Fund Marketing & Raising Capital  Rule 506(c) of Regulation D bans industry "bad actors" (i.e., certain felons).  The Bad Actor Disqualification rule is available here and a summary of the law available here.

Use of Investment Adviser Sub-Contracts Many hedge fund sponsors opt to set up a hedge fund management company outside of their home country or home state, whether for tax, commercial, or regulatory reasons.  If you (as the hedge fund sponsor) set up the hedge fund management company outside of your home country or home state, you should have a sub-agreement for "consultancy" or "advisory" services between yourself and the offshore (or out of state) hedge fund management company.   In the United States, an investment adviser is an investment manager.  However, there is legal distinction between “investment manager” and “investment adviser” in most other countries.  If you live in a country where a such a distinction exists and if you set up the hedge fund's manager in such a country, you should position yourself through contracts as a consultant to the offshore investment manager.  Such "advisory" or "consultancy" services  (i.e., an independent research analyst) is not a regulated business activity.  To do this, you need an agreement between the offshore investment manager and a sub-agreement between the investment manager and the investment adviser.  The goal of the agreements is to allow you to offer research services to the offshore investment manager for a fee.  There are other approaches to consider as well.  When the investment advisory agreement is drafted properly and timely executed, you will be able to control the timing, tax character and amount of taxable income reportable in your home country.  In addition, if the investment management agreement between the fund and the investment manager are drafted correctly and timely executed, further income deferral is possible.  A hedge fund manager seeking to defer substantial amounts of  management and performance fees should use third-party (i.e., “outside”) directors to ensure that the deferral mechanisms are respected for home country tax purposes.  Contact Us for Assistance

Call Us First  We are experts in international hedge funds and tax. Click on any reference below to our leading articles:

Strategic Hedge Fund Planning by Hannah Terhune.  Wilmott Magazine Ltd. (Volume 2013, Issue 63, pages 8-11 January 2013).

Hedge Funds - Limited Partners' Right of Access After Parkcentral Global, L.P., v. Brown Investment Management, L.P. by Jim Brennan.   Cititrust Edge Magazine (4th Quarter 2012).

Strategic Hedge Fund Planningby Hannah Terhune.  Canadian Hedgewatch (March 2012).

Strategic Hedge Fund Planning by Hannah Terhune.  MoneyScience (March 2012)

Hedge Funds - Limited Partners' Right of Access After Parkcentral Global, L.P., v. Brown Investment Management, L.P. by Jim Brennan.  Canadian Hedgewatch (July 2011).

Planning for Cross-Border Financing Arrangements.  Practical International Tax Strategies (May 31, 2011).

U.S.--Tax Traps of Non-U.S. Issuer Debt Offerings.  Practical International Tax Strategies (April 15, 2011).

America the Beautiful Tax Haven.  Cititrust Edge Magazine (1st Quarter 2011).

Offshore Hedge Fund Focus:  Master & Feeder.  Cititrust Edge Magazine (4th Quarter 2010).

U.S.--Cross Border Credit Agreements:  Planning for U.S. Withholding Taxes.  Practical International Tax Strategies (November 15, 2010).

Starting an Offshore Fund.  themanager.org (June 2008).

Mixing Investment Adviser and Brokerage Services.  Hedge Fund Monthly by EurekaHedge.com (October 2007).

Offshore Fund Taxation.  Hedge Fund Monthly by EurekaHedge.com (May 2007).

Forex Trader to Forex Manager.  Offshore Business Magazine (November 2006).

Forex Trader to Forex Fund Manager:  The Path to Success.  Hedge Fund Monthly by EurekaHedge.com (October 2006).

Drafting Hedge Fund Performance Allocations.  Hedge Fund Monthly by EurekaHedge.com (August 2006).

Como Crear su Propio Hedge Fund by Hannah M. Terhune, Eva Porras, Argilio Rodriguez and Garrett Fisher (2006).

Offshore Hedge Funds: Focus on Master/Feeders by Hannah M. Terhune (2006).

Temas Sobre Impuestos de Sociedades Colectivas para Hedge Funds en Paraiso Fiscal by Hannah M. Terhune (2006).

Establish a Marketable Track Record with an Incubator Fund by Hannah M. Terhune (2006).

Must I Register as a Commodity Pool Operator? by Hannah M. Terhune (2006).

Do’s and Don’ts for Crafting Hedge Fund Peformance Allocations by Roger D. Lorence and Hannah M. Terhune. Derivatives:
Financial Products Report (an RIA publication) (September 2005).

Trading Foreign Index Contracts? Know the Tax Rules Before You Trade by Hannah M. Terhune and Roger D. Lorence. Stocks, Futures and Options (June 2005).

Practical Strategies For Section 475(f) Elections by Roger D. Lorence and Hannah M. Terhune. Derivatives Financial Products Report (WG&L/RIA,a Thompson Company) (March 2005).

Forex Hedge Fund Management by Hannah Terhune and Roger D. Lorence.  Currency Trader (March 2005).

Advising Clients on Internet Server Co-Location Agreements, Practical International Tax Strategies (March 15, 2004).

Structuring and Financing International Operations Using Hybrid Entities and Tax-Efficient Financing Practical U.S./International Tax Strategies (Jan. 15, 2004).

Hedge Fund Compensation Arrangements. Practical U.S./Domestic Tax Strategies at Page 18 (Dec. 2003).

U.S. Inbound Investment – The Portfolio Interest Exemption. Practical U.S./International Tax Strategies (Dec. 15, 2003).

Foreign Futures Planning: The 60/40 Question. Practical U.S./International Tax Strategies at Page 12 (Sept. 30, 2003).

Managing Offshore Hedge Funds - A View from the Beach: Practical U.S./International Tax Strategies at Page 9 (June 15, 2003).

Offshore Hedge Funds - Master/Feeder Compliance Issues: Practical U.S./International Tax Strategies at Page 9 (May 15, 2003).

Ready for Help? Please call us (307) 213-4732 or e-mail Hannah Terhune, international hedge fund and tax attorney.

Leading Media Content & Articles on Hedge Funds & International Tax Planning

Follow @HannahTerhune Read leading, cutting-edge articles on hedge funds and taxes by Hannah Terhune, hedge fund and international tax attorney. Her articles are widely published on the Internet and recommended by TheStreet.com and other respected media.
Capital Management Services Group, Inc. is an authority in the hedge fund industry. It is a forward thinking law firm focused on creating long-term collaborative relationships with a select group of clients interested in the same.  It strives to provide “high touch” service and perform a defined set of legal and other services with impeccable efficiency.  Our best ideas are not on this website. When you consult with us, you have access to a unique and desirable blend of professional experience. Give us the opportunity to put our knowledge and expertise to work for you. We provide high quality services at competitive rates. We offer “white glove” corporate concierge service to select clients.  Need to develop a tax and regulatory footprint outside of your home country? Give us a call and let us prove what we can do for you.  We offer virtual residence and virtual office services in Delaware, Florida and in other locations. We can assist with opening U.S. bank and brokerage accounts. We have many ideas and the resources to implement them. Get answers to your specific questions and purchase a consultation with a lawyer.  We look forward to connecting with you personally and are confident that you will be impressed. We set up a variety of investment funds, provide business and global tax advice, while offering continuous support services to our clients.  We help our clients as their needs evolve and take pride in maintaining relationships with our clients. The views expressed on this website are subject to change based upon new information, new technology, consideration of new perspectives and/or for no reason at all. This website exists for educational purposes and nothing on this website should be considered as legal advice.  Website content and design are copyrighted 2023© by Hannah M. Terhune and all rights are reserved.

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Capital Management Services Group, Inc. is an authority in the hedge fund industry. It is a forward-thinking law firm focused on creating long-term collaborative relationships with a select group of clients interested in the same. It strives to provide “high touch” service and perform a defined set of legal and other services with impeccable efficiency. We cater to high-net worth individuals and businesses in the alternative investment community. We are experienced in wealth management, U.S. and offshore hedge fund formations, incubator hedge funds, spot forex funds, master/feeder funds, commodity pools, commodity trading advisory businesses, investment advisory companies, fund administration, SEC and state investment adviser registrations, compliance with Blue Sky laws, and hedge fund taxation. We offer professional tax advice, state and federal SEC advice, business planning services, international tax, and tax return preparation. We are tax experts! 
All matters are managed personally by our attorneys and professional staff. We offer back-office support. You may have an unusual situation that needs special attention. We are ready to help. Perhaps you need extra support in an area, such as year-end accounting or performance audits. Blue-sky filings or Investment Advisor Registration We can help. We offer complete 24/7 access and great working relationships. We are simply second to none. Think outside the ordinary.  Our best ideas are not on this website. When you consult with us, you have access to a unique and desirable blend of professional experience. Give us the opportunity to put our knowledge and expertise to work for you. We provide high quality services at competitive rates. We offer “white glove” corporate concierge service to select clients.  Need to develop a tax and regulatory footprint outside of your home country? Give us a call and let us prove what we can do for you. We offer virtual residence and virtual office services in Delaware, Florida and in other locations. We can assist with opening U.S. bank and brokerage accounts. We have many ideas and the resources to implement them. Get answers to your specific questions and purchase a consultation with a lawyer. We look forward to connecting with you personally and are confident that you will be impressed. We set up a variety of investment funds, provide business and global tax advice, while offering continuous support services to our clients. We help our clients as their needs evolve and take pride in maintaining relationships with our clients. The views expressed on this website are subject to change based upon new information, new technology, consideration of new perspectives and/or for no reason at all. This website exists for educational purposes and nothing on this website should be considered as legal advice. Website content and design are copyrighted 2024© by Hannah M. Terhune and all rights are reserved.