About hedge fund investing
About Eurekahedge databases
About hedge fund investing
Who typically invests in hedge funds?
Usually defined as "Accredited Investors", various institutions, corporate treasuries, endowments, fund of funds, family offices, private banks and pensions invest in hedge funds.
What is an
Accredited Investor/Qualified Purchaser?
This can vary from jurisdiction to jurisdiction, depending on the investing process in question and is something that each individual should verify within their own Jurisdiction prior to investing with a hedge fund. Put simply, if you cannot afford to lose the money you invest then you should not be looking at hedge funds as a viable investment route.
What is the minimum investment?
The minimum investment varies from fund to fund. Although some funds are charging as low as US$10,000 these are very much the exception and a common starting range would be between US$250,000-$500,000. Established funds can have much higher minimums; $10,000,000 or more, depending on the fund and manager. The fund manager can waive the minimum at his sole discretion but this is usually only undertaken to accommodate serious investors who stipulate an intent to allocate substantially more than the stated minimum, depending on how this initial allocation performs.
What fee structure do most hedge funds adopt?
Hedge funds fee structures vary, dependant on jurisdiction, domicile and, most importantly, investor base. The most common fee structure is the standard "1 and 20": a 1% management fee (% of assets) and 20% performance fee (% of profits), annually (Normally the management fee is collected in .25% quarterly trenches, in advance, and the performance fee is calculated annually). In addition to this, there are other performance-related restrictions and expansions on the collection of fees: high-water marks and hurdle rates being the most common.
Are hedge fund returns reported before or after fees?
Most funds report their returns from previous years "net of all fees." (net of management fees and incentive/performance fees). However, some funds report gross returns or returns net of management fees but gross of incentive /performance fees. Other variations occur but, regardless of which reporting method is received, the majority of hedge funds stipulate that pre-audit figures are subject to adjustment after year end (usually a minor or nominal adjustment).
What are "offshore" hedge funds?
Offshore hedge funds are vehicles, registered/domiciled in offshore jurisdictions, designed to allow investment in a fund without being exposed to the strictures of tax law in any given onshore legislation.
Who can invest in offshore hedge funds?
Anyone with offshore money can invest in offshore hedge funds. Getting the money off shore without incurring the same tax the offshore structure has been established to avoid is the issue here and this differs from legislation to legislation.
Do investors still pay fees even if the fund loses money?
The investor always pays the management fee on assets held within the fund, but performance fees are applicable only after positive performance has been achieved (even then a hurdle rate or high water mark may grant the investor exemption of performance fee payment).
What is a high water mark?
Where a hedge fund applies a high water mark to an investor's money, this means that the manager will only receive performance fees, on that particular pool of invested money, when its value is greater than its previous greatest value. Should the investment drop in value then the manager must bring it back above the previous greatest value before they can receive performance fees again.
About Eurekahedge databases
Why do your charge for your hedge fund data?
Eurekahedge prides itself on delivering a data service that fits the needs of our clients. We are working to a world class vision and this means that we must plough fees generated back into our business to continue tracking, updating, and interviewing hedge fund managers globally. With the anticipated high level of start-up activity and the rising level of attrition in the industry, maintaining an accurate overview of the universe requires the best possible resources. This is what Eurekahedge charges a premium to maintain.
returns posted on Eurekahedge differ from the
actual returns of the fund?
Of course, and we do not audit the figures provided so there are no guarantees. However, what you get with Eurekahedge is an authorised NAV figure, either direct from the investor update list or from the fund administrators.
In what format is the Eurekahedge database presented?
Eurekahedge make its data available either through a subscription to our own database online or through data-feeds, issued on regular basis to our premium clients. Our data-feeds, to date, have been compatible with any format asked of us.
are updates to the Eurekahedge database made available?
The Eurekahedge Database is updated on an ongoing basis, throughout the working day. We release our datafeeds and indices data every day at 00:00 GMT and these are made available to download from our website at this time.
subscribe to the Eurekahedge database?
The Eurekahedge hedge fund database suite is available to accredited investors or affiliated professionals only. We do however make exceptions for academic institutions and their members who require market leading data on the hedge fund universe for research purposes.
Who are Eurekahedge’s current users?
Eurekahedge’s accredited investors and premium subscribers include, but are not limited to the following: treasuries, trusts and endowments, family offices and multi-family offices, pension funds, institutional investors, sovereign wealth funds, private banks, portfolio managers, financial advisors, hedge funds, funds of funds, prime brokers, administrators, market research firms, Islamic funds.
Where could I read about latest hedge fund trends?
Eurekahedge has been publishing a monthly report since October 2008 and is the most in-depth source of information on the global hedge fund industry available today. The report features expert analysis on asset flows, hedge fund performance and regional key trends, as well as the league table of top-performing funds across region. The main contents of the report are wholly researched and written by Eurekahedge and do not contain contributions. Issues of The Eurekahedge Report can be found here.
The Eurekahedge Hedge Fund Index: The world’s largest equal weighted suite of over 200 alternative fund indices. With subsets based on region, country, strategy and fund size, it is a popular benchmarking tool for single- and multi-manager clients seeking to benchmark against a relevant index that more closely mirrors their regional and strategic mandates and for investors looking to ensure that their managers are outperforming a "bucket" of their peers.
The Mizuho-Eurekahedge Index: An asset weighted suite of indices. It is an interactive index that provides free access to bespoke indices online and allows the creation of customised indices by strategy and investment region. Utilising a new and rigid methodology, this suite of global indices can easily be customised by investors for portfolio benchmarking and the building of investment products such as ETFs, investible indices and replication indices.
The Eurekahedge ILS Advisers Index: ILS Advisers and Eurekahedge’s collaborative equally weighted index of constituent funds. The index is designed to provide a broad measure of the performance of underlying hedge fund managers who explicitly allocate to insurance linked investments and have at least 70% of their portfolio invested in non-life risk.
More information on the Eurekahedge indices and methodology can be found here.
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