Formation guide
A map of the work. Not a recommendation.
These notes are for a manager preparing to speak with counsel. They name the vehicles, the providers, and the sequence. They do not tell you which structure to use, which filing to make, or which threshold to stay under.
Structures counsel is usually asked about
A hedge fund is not a single document. It is a set of vehicles, a manager, and a group of contracts with service providers. The shape depends on who the investors are expected to be, and on tax and regulatory questions that belong to counsel. The descriptions below are teaching maps.
Delaware limited partnership, LLC general partner
Managers with US taxable investors often ask counsel about a Delaware limited partnership, formed under the Delaware Revised Uniform Limited Partnership Act, with a limited liability company as general partner. The general partner is usually the vehicle the manager controls. The limited partners are the investors. Counsel drafts the partnership agreement. A registered agent or counsel's filing service forms the entities, on the client's instructions. We do not form them.
Names that come up in that conversation include the Investment Company Act and the exemptions commonly called 3(c)(1) and 3(c)(7), and the Investment Advisers Act. Those are labels for counsel. This page is not a checklist for claiming an exemption, and we do not decide which one applies.
Cayman master-feeder
Where investors are expected to arrive from more than one tax world, counsel is often asked about a master-feeder. An onshore feeder, frequently a Delaware partnership, and an offshore feeder, frequently a Cayman vehicle, both invest into a master fund that holds the portfolio. Whether a US taxable investor, a US tax-exempt investor, or a non-US investor should use one feeder or the other is a tax conclusion. Tax counsel gives it. We do not.
In Cayman, the Private Funds Act and the Mutual Funds Act are different regimes. The Cayman Islands Monetary Authority is the authority's name. Counsel determines which regime, if either, applies, and who files. We track the status of that work. We do not file it.
British Virgin Islands
A BVI company or limited partnership is another vehicle counsel may put on the table, often for an offshore fund or a feeder. The Securities and Investment Business Act is the statute counsel will open. Approved funds, private funds, and other categories are counsel's classification. We do not explain how to fit a fund into one of them.
Luxembourg and Ireland
In Luxembourg, an SCSp is the partnership form, and a RAIF is a fund form often discussed where an authorised alternative investment fund manager is already in place. The CSSF is the commission. Whether a product needs approval is a legal conclusion. In Ireland, an ICAV or an investment limited partnership comes up, and QIAIF is a Central Bank of Ireland category for qualifying investors. The Central Bank's process belongs to counsel and the manager.
A wider comparison, including Malta, Jersey, Guernsey, and the Singapore variable capital company, is on the jurisdictions page.
Service providers
We do not name firms, and we do not endorse any. The client engages each provider. We can collect the proposals the client has asked for and keep the questionnaires in the file.
- Fund counsel and tax counsel. Engaged by the client. They write and advise. We do not.
- Administrator. Engaged by the client. We hold the proposal and the due-diligence questions.
- Auditor. Engaged by the client, on the timetable counsel and the offering describe.
- Depositary. Engaged by the client only where counsel has concluded one is required.
- Prime broker or custodian. Engaged by the client. Subscription money does not pass through this practice.
- Registered agent. Engaged by the client, on counsel's instructions, to form and maintain the entity.
An illustrative sequence
The same seven stages appear in the portal. A Delaware partnership with counsel already retained is often spoken of in months. A cross-border master-feeder with a depositary is longer, and it waits on other people's calendars. These are not dates we offer.
- 01
Onboarding
The file is opened, the principals are named, and the questions reserved for counsel are written down.
- 02
Structuring
A structure is discussed with counsel. The practice keeps the map. Counsel decides whether it is the right one.
- 03
Jurisdiction and entities
Names, formation, and registered offices are instructed by counsel or the registered agent. We track the checklist.
- 04
Service providers
Administrator, auditor, and, where the structure needs one, a depositary. Proposals are compared. Appointments are the client's.
- 05
Offering documents
Partnership agreements, company documents, and offering papers circulate in draft. Counsel writes them. We keep the record.
- 06
Regulatory filings
Filings, notices, and registrations are identified by counsel. We track what counsel has marked as required, and nothing else.
- 07
Launch
A closing checklist: signatures, funds flow, and the conditions counsel has marked. Subscription money does not pass through this practice.
What the bill is made of
Our coordination is quoted after a scoping conversation. We do not publish a rate card, and the ranges below are not our fee.
Government and registered-agent fees are usually the small line. Counsel, the administrator, and the audit are usually the large ones. A manager comparing a first Delaware partnership might set aside a planning range, before this practice's fee, that runs from the low tens of thousands of dollars into six figures once counsel, formation agents, and a first-year administrator are included. The width is deliberate. It is an illustration of how wide the market is, not a quotation and not a survey. Your counsel's engagement letter is the number that matters. Cross-border work, with offshore counsel and a depositary where one is required, is commonly budgeted higher. We do not publish a figure for it.
UK and EU managers
The Alternative Investment Fund Managers Directive is the EU framework counsel will have in mind. The United Kingdom has its own regime after Brexit. The names differ. Counsel maps the manager onto one of them. Marketing into the EEA or the UK is a separate question from where the fund vehicle is formed. We do not passport a fund, and we do not advise on marketing.
Article 3 of the directive is often cited for a lighter registration where assets under management are under €100 million, or €500 million where the fund is unleveraged, closed-ended, and offers no redemption rights for five years. Those figures are orientation only. They are not an instruction to arrange a business so that it falls under them, they go stale, and local law is counsel's to read. A depositary is part of many full-scope arrangements. Whether one is required is counsel's conclusion.
What we keep in the file is the list of questions counsel asked, the provider appointments the client makes, and the status of drafts.
This guide is not legal, tax, accounting, or investment advice, and it is not an offer or a solicitation. Regulatory names are orientation for a conversation with counsel. They are not a compliance manual. An inquiry to this practice does not create a client or fiduciary relationship.