A hedge fund business plan : investment theory, operations, and capital raising for Broadgates Capital Management

[摘要] Launching a start-up hedge fund is a complex, multifaceted endeavor that requires an understanding of the interconnectivity between capital raising, investment strategy, regulation, and fund operations. The purpose of this document is to explore each of these categories and provide a plan for the launch of a hypothetical new fund (Broadgates Capital Management). In doing so, the key challenges of launching a new fund are uncovered, while clearly identifying how I would think about the fund;;s investment methodology and process. The hedge fund industry is increasingly competitive, with over 1,000 new funds launching every year. In addition to these launches, more than 900 funds are liquidated annually. As investor expectations and regulatory guidelines continue to institutionalize hedge funds, managers are challenged with balancing not only the implementation of a value generating investment strategy, but also ensuring the efficient execution of the fund;;s operating/regulatory infrastructure. In order to successfully attract investors, all three of these critical elements must be in place. This paper argues that active fund management does in fact add value to investor portfolios and proposes a quantitative portfolio sorting strategy with a value-screen overlay. Broadgates Capital Management hopes to generate high risk adjusted returns by focusing on certain market anomalies while also utilizing traditional, value driven, fundamental analysis. An offshore master feeder fund structure will be utilized with the formation of a limited liability corporation as the management company. Finally, in order to raise between $100 and $150 million of investment capital, a meticulously constructed marketing strategy that articulates exactly why investors should choose Broadgates Capital Management is presented.

[发布机构] Massachusetts Institute of Technology