Long Short Hedge Funds

Despite ‘Brexit’, there has been tremendous growth in the European hedge fund arena over the last 10 years – where increased monetary policies and continued low interest rates point towards continued growth in this market.   European investment managers have raised significant amounts of funds in Europe and US.  London remains the European hub for hedge fund managers and the regulatory infrastructure retains its prominence as the ‘gold standard’ of regulation.  The interest of Long Short Equity Funds have been sparked by a continued low interest environment where family offices are actively deploying capital to see a stable and diverse return on capital.

Long Short Hedge Funds are specific funds designed for trading strategies, often with a mixture of;

  • Equity
  • Debt
  • Foreign Exchange
  • Commodities
  • Derivatives (futures, options, CDS)

Given the broad trading strategies and instruments, hedge funds are open ended, liquid funds and time markets based on events (E.g. COVID-19 lockdown of March 2020) and statistics/figures based on companies/governments/GDP growth.  

The fund is managed by an experience investment manager who would form an investment view on whether a financial asset was under-performing/undervalued or overvalued.  The trading ultimately happens based on the analysis of the investment manager who would take a leveraged and calculated approached for maximum gain – hence the name ‘Long Short’. 

Investors (limited partners) would generally ‘follow’ an investment manager, by way of past performance. Investment managers like Ray Dalio (Bridgewater Associates), Warren Buffet (Berkshire Hathaway) all launched long short hedge funds to build up a loyal investor following.  

Thus, Long Short Hedge Funds are very common amongst investment managers and analyst who have historically worked within an organisation, but are now seeking to establish their own investment management organisation.

 

Hedge Fund Launch - Why XCAP?

Unlike other regulatory hosting platforms and European AIFM platforms, we specialise in structuring, launching and hosting long short hedge funds under the AIFMD regime.  Rather than be a generalist regulatory hosting platform, we offer bespoke services to long short hedge funds, complete with integrated solutions such as risk management, prime brokers, custodians, fund administrators and legal support where required. 

By being a true specialist, allows us to add genuine value to our hedge fund clients, from a capital raising point of view, to offering assistance in managing risk and compliance. 

Our regulated investment manager and European AIFM are Vantage Point Capital, who are directly authorised by the Financial Conduct Authority and as a Small Scope AIFM.  

Hedge Funds - How can XCAP help? 

Whether you are a seasoned professional in hedge funds, or looking to launch your first fund – we offer a comprehensive platform for hedge funds that will allow you to ‘Plug and Play’ your fund, from structuring, fund memorandum, launching, risk management, regulatory cover and capital raising.   Unlike other hedge fund platform, who give you control in which service providers you would prefer using;

Our hedge fund service include, but not limited to;

  • Competitive and flexible pricing, specifically for Social Impact Funds
  • Fund Structuring & Set Up
  • Fund Memorandum
  • Prime Brokers/Custodians
  • Legal Counsel/Support on Taxation, Investment Management Agreements
  • Integrated Fund Administration & Auditing
  • FCA Regulatory Hosting (FCA Appointed Representative)
  • European AIFM/ManCo Hosting for the Fund
  • European Passporting to all 29 EEA States
  • Capital Raising
  • Risk Management / External Risk Committee

Hedge Fund Launch

The number of hedge funds established in Europe have increased at record levels, with no indication of slowing down.  Once the biggest drives is non-EEA capital from US, Middle East and Far East pouring into regulated investment structures which give the investment managers creditability when capital raising.  

With demand from investors continuing to grow for long short hedge funds – the European fund sector has been earmarked to be one of the fastest growing asset classes over the next 10 years in the European Union.  Despite ‘Brexit’, the UK continues to drive the most concentration of hedge fund managers regulated under the Financial Conduct Authority.  

 

If you are interested in launching your long short hedge fund or are an analyst / investment manager thinking about flexible working solutions, but want to learn more about costs, please visit our bespoke ‘Xchanging’ platform by clicking here.

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