What is series accounting for hedge funds?

Series: An alternative for funds with multiple issues or redemptions of shares or units is the series accounting method. This method uses different series of shares or units within each class. Each series will have the same rights attached to them but will have a different issue date and different net asset value.

What is a multi strategy hedge fund?

Multi-Strategy hedge funds combine a variety of different investment strategies that are generally uncorrelated, with the goal of delivering a less volatile return stream to investors. Each investment strategy is typically executed by a portfolio manager (PM) who is dedicated to their respective strategy.

Do hedge funds need Series 65?

The legal requirements of the state in which the hedge fund is registered may necessitate the fund manager obtaining a Series 65 license, administered by FINRA.

Do you need a Series 7 to work at a hedge fund?

Because the hedge fund in not regulated as a broker, a hedge fund manager does not need to have a series 7 license (assuming that the manager is also concurrently acting as a broker-dealer representative).

What is Multi Series accounting?

Series or Multi-Series Accounting is used by fund managers which issues multiple series of shares for their fund, not necessarily with the same NAV. Typically, a monthly dealing fund would issue a new series of shares for all investors that invested each month.

What is the difference between GAV and NAV?

GAV is the sum of the market value of all assets within a fund whereas calculating NAV accounts for the debt associated with the fund.

Which hedge fund strategy has the highest return?

Outside of equities, the highest-returning hedge fund strategies in 2020 were event-driven funds, which gained 9.3 percent for the year, according to HFR. Macro hedge funds returned 5.22 percent for the year, while HFR’s relative value index ended 2020 up 3.28 percent.

What is the difference between Series 65 and 66?

The 66 exam is only for those individuals who are registered for, or completed the Series 7 exam. It combines the Series 63 with the Series 65 exam. The Series 65 exam is designed for those who do not have a Series 7 license.

Do you need a CFA to start a hedge fund?

Certain hedge funds require an MBA or CFA. Many people get both, but getting both is really a waste of time. If you already have an MBA, it is a much better use of time to spend the same countless hours researching good investment ideas than trying to pass a memorization test like the CFA.

What is the Series 63 license for?

The Series 63 license is intended to measure an applicant’s knowledge and understanding of state law and regulations. It is required for individuals soliciting the purchase or sale of securities products, such as mutual funds, variable annuities, stocks, or bonds within a state.

Does Equalisation go on tax return?

The equalisation payment is not treated as taxable income – it is a return of the investor’s capital and will reduce the amount invested for the purposes of capital gains tax (CGT).

Why do hedge funds use the series of shares method?

Many hedge funds use the series of shares methodology because it is the simplest and most straight- forward of the equalization methods. When using series of shares accounting, the fund uses multiple “series of shares”, one for each period of issue, each with a different NAV per share and high water mark.

What are the different types of hedge accounting?

Types of Hedge Accounting 1 1 – Fair Value Hedge. 2 2 – Cash Flow Hedge. Cash Flows Cash Flow is the amount of cash or cash equivalent generated & consumed by a Company… 3 3 – Net Investment Hedge. Functional Currency The term functional currency represents the currency of the location in… More

When can an economic hedge be treated as an Accounting Hedge?

“There is a distinction between an economic hedge and an accounting hedge, and ASC Topic 815 has specific and complex guidance on when an economic hedge can be treated as an accounting hedge.” Companies first must identify whether they have a business risk that the use of a derivative can help to solve. This will vary by company and by industry.

What does ASU 2017-12 mean for hedge accounting?

Although ASU 2017 – 12 is intended to alleviate some complexities and make hedge accounting easier to apply, significant work remains.