SAN DIEGO, CA, (PRWEB) January 28, 2013
Despite disappointing returns and sweeping regulatory changes in the hedge fund industry in 2012, many industry managers are eyeing their options for launching new hedge funds in 2013. This week, hedge fund industry site HedgeFundMarketing.org reviews the considerations and strategies that face managers in determining where to launch a new hedge fund.
In a new article titled “Domiciling a New Hedge Fund – Key Considerations,” HedgeFundMarketing.org says that choosing where to launch a new fund is perhaps the top priority for hedge fund managers. Key to considering where to domicile a new hedge fund is investor need. Due diligence must be performed to determine the needs of targeted investors in each region under consideration.
While the number of offshore hedge funds continues to rise, there is no clear-cut formula for choosing the best new fund market venues. A hedge fund manager’s primary consideration will boil down to the target investor’s preferences, and those preferences are varied and complex. Levels of regulation in the fund domicile, for instance, matters to investors.
Some prefer the less regulated fund venues of the Cayman Islands, the British Virgin Islands, the Seychelles, and the United States, while others place their trust in the more regulated markets of Luxembourg or Ireland.
New hedge fund managers will need to approach their country of choice with a marketing strategy designed and tested for success within their potential investor pool. Familiarizing oneself with the different restrictions and guidelines that govern investor groups, institutions and jurisdictions to ensure that any jurisdiction considered for a hedge fund domicile well be recognized in the home countries of potential investors.
Distinctions in investor preferences can be as subtle as they are varied. New hedge fund managers must know all the factors that influence target investors in their own territory, above and beyond regulatory flexibility. The successful fund marketing strategy must consider things like variations in allowances and benefits among potential domiciles. For instance, some jurisdictions enable funds to access double tax treaties, which can reduce withholding tax rates on interest or dividends.
This is just one example of the type of critical thinking new hedge fund managers must apply to determine a strategy and marketing approach that will stand out in a sea of funds armed with the same information. Differentiating factors will be key to attracting hedge fund investors, as the pressure is on for managers to prove that possess a beneficial knowledge base or understanding of their market and funds that no other managers can offer.
According to HedgeFundMarketing.org, targeting investor requirements, and factoring those requirements in with the requirements of the new hedge fund are key to making the right decision on where to launch.
For more information on establishing a new hedge fund in 2013, visit the HedgeFundMarketing.org website.