Structure and participation of hedge funds, Financial Management

Assignment Help:

Structure and Participation of Hedge Funds:

The typical structure for a Hedge Fund is to facilitate the tax concerns of investors and fund managers. Basically, there are two or more pooling vehicles that serve the particular needs of the various types of investors. These are investment vehicles treated as a flow-through vehicle for taxable investors. They are typically Limited Partnerships (LPs) or Limited Liability Corporations (LLC), and allow the tax attributes of various investments to pass through directly to investors. The second pooled investment entity is typically a non-domicile or offshore corporation. This corporation is generally established in one of the tax haven jurisdictions, such as the Cayman Islands or Bermuda, especially for investment in US companies (or Mauritius for investment in India). This vehicle is structured in such fashion that it is to be treated as a corporation for tax purposes. Generally, in a corporation form of structure, investors are tax-exempt and non-resident investors, who are looking to have the tax characteristics of the underlying income, which would not pass through directly to them but be truncated.

There are other forms of business structure available that are not suitable for Hedge Funds; they are discussed as follows. The general partnership structure implies that each partner is jointly responsible for debts and losses that occur in a partnership; the personal assets of the partners are also attached. The domestic corporation form of structure results in double taxation. Therefore, generally limited partnership is a dominated structure in the domestic Hedge Funds and Corporation form for offshore Hedge Funds in tax-friendly countries in the Hedge Fund industry.


Related Discussions:- Structure and participation of hedge funds

Explain the internalization theory of fdi, Normal 0 false fal...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Municipal securities, Municipal Securities are debt securities ...

Municipal Securities are debt securities issued by a State, Municipality or a County in order to finance its capital expenditures. These securit

CASELET, Prepare your recommendation on Agarwal Cast Company

Prepare your recommendation on Agarwal Cast Company

Explain about economic order quantity, Q. Explain about economic order quan...

Q. Explain about economic order quantity? The economic order quantity (EOQ) model is basis on a cost function for holding inventory which has two terms: holding costs as well a

Is pro forma financial statements reveals positive trends, What action(s) s...

What action(s) should be taken if analysis of pro forma financial statements reveals positive trends?  Negative trends? When examine the pro forma statements, managers habi

Downside risk of convertible bonds, When the underlying stock becomes...

When the underlying stock becomes worthless, the percentage price declines the investors experience is given by, Percentage of Downside Risk=

Define the role of cash and of earnings, Define the role of cash and of ear...

Define the role of cash and of earnings while a corporation is deciding how much, if any, cash dividends to pay to common stockholders. In the long-run earnings are essential to

Determine the purchasing in leaminger plc, b) Each $1 of outlay prior to 3...

b) Each $1 of outlay prior to 31 December 2003 would mean a loss in NPV on the alternative project of $0·20. There is so an opportunity cost of using funds in 2002. Purchasing

Rate changes and duration estimate, To calculate duration, we need to...

To calculate duration, we need to first obtain the values for V - and V + where V - is the price when the yield decreases by certain number of basis points and V +

OPERATING CYCLE, #discuss the applicability of operating cycle to poultry b...

#discuss the applicability of operating cycle to poultry business.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd