Are there any legal barriers to setting up an entity where the funds of a large pool of investors are consolidated for investment in a hedge fund? So for example, getting 50 million into a single account/entity that is compromised of 100,000 accounts from different investors in total. Any thoughts would be great. Thanks.
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http://en.wikipedia.org/wiki/Fund_of_funds
I think he was talking about if one guy had an account with a HF, could the hedge fund legally take money from his friends who gave the first guy money and allowed him to place the money...kind of getting an investing group with 100 different people and having 1 guy place money in the hedge fund. A FoF is another legal entity so it would not be the same as friends giving other friends money to invest with. I always assumed this was legal and a way for hedge funds to keep the number of investors below 100, but I couldn't find anything about the legality of it.
Yes I believe everyone who invests in a feeder fund of a FoF has to be a qualified investor and meet the same net worth requirements..
If you want to take smaller investments you should consider opening a CTA or becoming a Commodity Pool Operator (CPO)...thses structures allow smaller investments and you can get paid based on performance I believe.
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