About hedge fund investing
Who typically invests in hedge funds?
What is an Accredited Investor/Qualified Purchaser?
What is the minimum investment?
What fee structure do most hedge funds adopt?
Are hedge fund returns reported before or after fees?
What are "offshore" hedge funds?
Who can invest in offshore hedge funds?
Do investors still pay fees even if the fund loses money?
About Eurekahedge databases
What can I get for free from Eurekahedge?
Why do your charge for your hedge fund data?
Can the returns posted on Eurekahedge differ from the actual returns of the fund?
What type of reporting style do the funds in the Eurekahedge database use?
In what format is the Eurekahedge database presented?
How often are updates to the Eurekahedge database made available?
Who can subscribe to the Eurekahedge database?
Who are Eurekahedge’s current users?
Where could I read about latest hedge fund trends?
What hedge fund indices does Eurekahedge have?
How does Eurekahedge calculate the statistics for the funds?
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 hurdle rate?
The established minimum return an investor's investment
must make prior to the application of performance/incentive
fees.
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.
What is a lock-up period?
This is the time period that you must hold your
assets ("lock-up" your money) within
a fund before they can be removed.
About Eurekahedge databases
What can I get for free from Eurekahedge?
You will receive access to our newsletters and indices pages without any further obligation.
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.
Can the
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.
What type
of reporting style do the funds in the Eurekahedge
database use?
The Eurekahedge Database
contains funds reporting performance net of all
fees.
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.
How often
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.
Who can
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.
What hedge fund indices does Eurekahedge have?
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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