What are the departments of a hedge fund?

Broad job categories in hedge fund firms include investing, trading, risk management, marketing, accounting, legal and compliance, and general support (for example IT, human resources, and administration).

What is the structure of a hedge fund?

Most hedge funds use one of the following organization structures: 1) a single entity fund, 2) a master feeder fund, 3) a parallel fund, or 4) a fund of funds. For purposes of this IPS unit, we will be focusing on master feeder funds as they are more common in International tax examinations.

How are investment firms structured?

Private equity firms are structured as partnerships with one GP making the investments and several LPs investing capital. All institutional partners of the fund will agree on set terms laid out in a Limited Partnership Agreement (LPA). Some LPs may also ask for special terms outlined in a side letter.

How many employees does a hedge fund have?

How many people does the average business in the Hedge Funds industry in the US employ? The average Hedge Funds business in the US has 9.8 employees.

What is the structure of a fund?

Each fund structure contains multiple funds, which are managed by an individual asset manager to a specific investment strategy. This means institutional investors can make their own investment choices, using any combination of funds to achieve their investment objectives.

What is a master feeder structure in a hedge fund?

A master-feeder structure is a device commonly used by hedge funds to pool taxable and tax-exempt capital raised from investors in the United States and overseas into a master fund. Separate investment vehicles, otherwise known as feeders, are established for each group of investors.

What are the legal structures in which hedge funds are housed?

Most commonly, domestic hedge funds are structured as a limited partnership with an LLC as the general partner. In this structure the hedge fund managers are provided limited personal liability in their position as member-managers of the general partner LLC.

What is a fund structure?

Structured funds are a type of fund that combines both equity and fixed-income products to provide investors with a degree of both capital protection and capital appreciation. Structured funds also use options, futures, and other derivatives, often linked to market indexes, to provide exposure to capital appreciation.

What is managing a hedge fund?

A hedge fund manager is firm or an individual who manages, makes investment decisions, and oversees the operations of a hedge fund. Managing a hedge fund can be an attractive career option because of its potential to be extremely lucrative.

How are fund of funds structured?

The fund of funds (FOF) strategy aims to achieve broad diversification and appropriate asset allocation with investments in a variety of fund categories that are all wrapped into one portfolio. A FOF may be structured as a mutual fund, a hedge fund, a private equity fund, or an investment trust.

What is the back office of a hedge fund like?

Middle and Back Office – The back office at a hedge fund consists of supporting areas such as compliance, accounting, operations, and IT. There are other areas as well, such as Risk Management and Investor Relations, which may be separate or part of the ones above.

What are the different positions in a hedge fund?

1 Junior Analyst or Research Associate – Random Task Monkey. 2 Hedge Fund Analyst – Number Cruncher and Researcher. 3 Senior Analyst or Sector Head – Builder and Pitcher of Investment Ideas. 4 Hedge Fund Portfolio Manager – Decision-Maker and Firm Representative.

What does a hedge fund trading team look like?

Trading Team – The Execution Traders who implement the Investment Team’s strategies and aim for the best price on each trade. Middle and Back Office – The back office at a hedge fund consists of supporting areas such as compliance, accounting, operations, and IT.

What does a hedge fund trader do?

Entry-level traders for hedge funds start with trading plain-vanilla equity, bond, or futures and gradually move on to complex trades like option combinations , high-frequency trading , arbitrage trading, or automated model based trading. Risk managers act as monitors to set limits and oversee any deviations in trading limits that can lead to risk.