https://www.hedgia.net 2026-10-16T14:45:44.305Z weekly 1 https://www.hedgia.net/about 2026-10-16T14:45:44.305Z monthly 0.8 https://www.hedgia.net/contact 2026-10-16T14:45:44.305Z monthly 0.7 https://www.hedgia.net/learn 2026-10-16T14:45:44.305Z weekly 0.9 https://www.hedgia.net/learn/guides 2026-10-16T14:45:44.305Z monthly 0.8 https://www.hedgia.net/learn/beginners/what-is-a-hedge-fund What is a hedge fund? https://www.hedgia.net/media/learn/b1.jpg A hedge fund is a private pool of money from several investors, run by one manager with one strategy. Each investor owns a slice sized by what they put in. Unlike a mutual fund, it isn't sold to the public, and the manager is usually paid a yearly fee plus a share of the profits. https://www.hedgia.net/media/learn/b1.mp4 45 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/why-hedge-funds-use-two-llcs Why do hedge funds use two LLCs? https://www.hedgia.net/media/learn/b2.jpg A fund usually has two companies. The Fund LLC holds investors' money, is offered under an SEC exemption, and passes gains through to each investor for tax. A Manager LLC, owned by the manager, runs the fund, so a claim about how the fund is run generally stops at that company instead of reaching the manager personally. Each new fund gets its own pair. https://www.hedgia.net/media/learn/b2.mp4 76 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/how-hedge-fund-managers-get-paid How do hedge fund managers get paid? https://www.hedgia.net/media/learn/b3.jpg Usually two ways: a yearly management fee on the fund, and a performance fee, a share of the profits. In one example, a $1,000,000 fund earns 20%, or $200,000. A 1.5% management fee is $15,000 and a 20% performance fee on the remaining profit is $37,000, so investors keep $148,000, a 14.8% return. In a losing year there's no performance fee, and a high-water mark stops investors paying twice for the same gains. https://www.hedgia.net/media/learn/b3.mp4 55 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/hedge-fund-lock-ups-and-withdrawals When can investors take money out of a hedge fund? https://www.hedgia.net/media/learn/b4.jpg It depends on the fund's terms. A hard lock-up keeps each deposit in for a set time, such as 12 months, and each new deposit starts its own lock-up; the manager can waive it in writing, for example for a hardship. Some funds instead let investors leave without full notice for an early withdrawal fee, which stays in the fund for the investors who remain. The point is to stop one investor's exit from forcing the fund to sell at a bad time. https://www.hedgia.net/media/learn/b4.mp4 41 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/three-laws-for-starting-a-hedge-fund Which laws apply to a hedge fund, and which part of the fund does each one cover? https://www.hedgia.net/media/learn/b5.jpg Three federal laws, each landing on a different piece of the fund. The Securities Act of 1933 covers selling fund shares: under Rule 506(b) there's no public advertising, with any number of accredited investors and up to 35 sophisticated investors who aren't; under Rule 506(c) you can advertise, but every investor must be accredited and verified. The Investment Company Act of 1940 covers the Fund LLC: under Section 3(c)(1) it isn't a mutual fund if it has 100 investors or fewer and sells privately, and a Regulation D offering, even under 506(c), counts as private. The Investment Advisers Act covers the manager, and depends on size: under $100 million your state is usually the regulator, from $100 million you may register with the SEC, and an adviser only to private funds is exempt from SEC registration until $150 million. https://www.hedgia.net/media/learn/b5.mp4 73 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/counting-investors-100-limit How do you count investors toward the 100-owner limit? https://www.hedgia.net/media/learn/b6.jpg Section 3(c)(1) lets a fund avoid registering as an investment company with 100 beneficial owners or fewer, and the count has rules. A person counts as one. An LLC or other entity usually counts as one, but if it was set up just to invest in your fund, you count its owners; and if it's another fund owning 10% or more of yours, its investors count instead. Knowledgeable employees aren't counted, and a stake received by gift or inheritance counts as the original owner's. Past 100, a fund needs 3(c)(7), where every investor is a qualified purchaser, or must register. https://www.hedgia.net/media/learn/b6.mp4 63 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/what-is-a-high-water-mark What is a high-water mark in a hedge fund? https://www.hedgia.net/media/learn/b7.jpg A high-water mark is the highest value an investor's account has reached after the manager was paid. The manager earns a performance share only on gains above it. If $100,000 grows to $120,000, a 20% share of the gain is $4,000, leaving $116,000 as the new line. If the account then falls and climbs back to $116,000, the manager earns no performance pay on that recovery. https://www.hedgia.net/media/learn/b7.mp4 44 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/where-hedge-fund-money-is-held Where is a hedge fund's money held? https://www.hedgia.net/media/learn/b8.jpg Not in the manager's personal account. The fund opens accounts in its own name: cash at a bank and trading at a broker, both owned by the Fund LLC. FDIC insurance covers up to $250,000 per depositor per bank, and the fund counts as one depositor; SIPC covers up to $500,000 if a broker fails. Neither covers investment losses. https://www.hedgia.net/media/learn/b8.mp4 41 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/hedge-fund-documents-investors-sign What documents do hedge fund investors sign? https://www.hedgia.net/media/learn/b9.jpg Three, usually. The offering memorandum explains the fund: its strategy, fees and risks. The operating agreement sets the rules of the Fund LLC: who decides, how profits are split and how money comes out. The subscription agreement is what each investor signs: how much they're investing, and confirmation that they qualify. https://www.hedgia.net/media/learn/b9.mp4 40 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/do-you-need-a-series-65 Do you need a Series 65 to run your own hedge fund? https://www.hedgia.net/media/learn/b10.jpg It depends on whether you have to register as an investment adviser. If your state requires registration, the people giving advice generally must pass an exam such as the Series 65. Many states exempt small private fund managers, and exempt managers often need no exam, though some states differ. The Series 7 is a broker's license; raising money for your own fund usually doesn't require it. What makes the fund itself legal is its exemptions: one for the offering, one for the fund, and your adviser status. https://www.hedgia.net/media/learn/b10.mp4 45 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/forming-a-fund-in-delaware If I form my fund in Delaware, do Delaware's rules apply? https://www.hedgia.net/media/learn/b11.jpg Only some. Delaware's LLC law governs the inside of the company: how it's managed and what the operating agreement can say. Adviser rules come from where you do business, so a manager in Texas is regulated by Texas until it's large enough for the SEC. Offering notice filings follow each investor's state. And running the fund from home usually means registering the Delaware LLC in your state too, as a foreign LLC, with its own fees. https://www.hedgia.net/media/learn/b11.mp4 40 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/beginners/investing-your-own-money-in-your-fund How do I put my own money into my hedge fund? https://www.hedgia.net/media/learn/b13.jpg Your money goes in like any investor's: through a subscription, into your own capital account, so the fund can track every owner's share. For federal tax, an LLC with a single owner is usually disregarded and reports on its owner's return; once a second owner joins, it's a partnership by default, filing Form 1065 with a K-1 for every owner. Investing without fees takes a fee-free class or a written waiver that the documents allow. https://www.hedgia.net/media/learn/b13.mp4 41 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/non-accredited-investors-in-a-hedge-fund Can non-accredited investors invest in a hedge fund? https://www.hedgia.net/media/learn/f1.jpg Yes, in limited numbers. Under Rule 506(b), an offering can include any number of accredited investors plus up to 35 who aren't. Each non-accredited investor must understand the risks, alone or with an adviser's help, and you need a real basis for believing that before they invest. They're also owed more information than accredited investors. https://www.hedgia.net/media/learn/f1.mp4 43 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/what-a-non-accredited-investor-must-receive What does a non-accredited investor receive before investing in a 506(b) fund? https://www.hedgia.net/media/learn/f2.jpg Four things, before the sale: a disclosure document with financial statements (sometimes audited), a chance to ask questions and get answers, a summary of anything you gave accredited investors, and notice that they can't freely resell their interest. The list is the same whatever the amount invested. https://www.hedgia.net/media/learn/f2.mp4 41 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/can-i-post-my-hedge-fund-returns Can I post my hedge fund's returns on social media? https://www.hedgia.net/media/learn/f3.jpg Not while you're raising money under Rule 506(b), which bars general solicitation: public posts, cold emails to bought lists, and open webinars about the fund. You can share market views; you can't pitch the fund to people you don't have a real relationship with. To advertise, use Rule 506(c), where every investor must be verified accredited. https://www.hedgia.net/media/learn/f3.mp4 36 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/who-counts-as-an-accredited-investor Who counts as an accredited investor? https://www.hedgia.net/media/learn/f4.jpg A person qualifies through any one of three doors: income over $200,000 in each of the last two years (over $300,000 with a spouse or partner) with the same expected this year; net worth over $1 million, not counting their home; or a Series 7, 65 or 82 license. New mortgage debt taken on in the 60 days before investing can count against net worth. https://www.hedgia.net/media/learn/f4.mp4 52 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/state-adviser-registration-client-limits How many clients can I have before I must register as an adviser in my state? https://www.hedgia.net/media/learn/f5.jpg It depends on the state. Some let a small adviser skip registration with only a few clients there. In New York, Georgia and Florida it's fewer than six, and New York counts your fund as one client. Illinois, New Jersey and Pennsylvania allow up to five. North Carolina, Louisiana and Kansas allow fewer than 15, if you don't hold yourself out as an adviser. So the same fund can be exempt in one state and need registration in the next. https://www.hedgia.net/media/learn/f5.mp4 34 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/state-notice-filings-for-fund-investors Do I need to file in my investor's state? https://www.hedgia.net/media/learn/f6.jpg Usually yes. State notice filings for Rule 506 offerings follow the investor, not you. Sell to someone in New Jersey and New Jersey wants a notice filing, generally within 15 days of the first sale there. The sale can happen when they sign, before money moves. Most states take filings through NASAA's EFD system, and fees vary: New York charges up to $1,200, while Florida requires none. https://www.hedgia.net/media/learn/f6.mp4 35 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/raising-your-first-fund-from-people-you-know How many names do I need to raise a first fund? https://www.hedgia.net/media/learn/f7.jpg More than you think. In one example pipeline, 20 names lead to 12 conversations, 6 requests for documents, 4 people who say they're probably in, and 3 who wire money. Start early and log every step: who, when and what you shared. Under Rule 506(b), that log is your record of a real relationship with each person before you pitched them. https://www.hedgia.net/media/learn/f7.mp4 30 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/friends-and-family/form-d-filing-deadline When is Form D due, and what goes on it? https://www.hedgia.net/media/learn/f8.jpg Form D is a short notice to the SEC that you're selling under Regulation D, due within 15 days of your first sale. It lists who runs the fund, the exemption, the offering size and how much has been sold. There's no SEC filing fee; it's filed on EDGAR and is public. You need EDGAR access codes first, which takes a notarized form. While the offering continues you amend it each year, and most states want a notice filing too. https://www.hedgia.net/media/learn/f8.mp4 39 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/506c-verification-by-minimum-investment Can a high minimum investment verify accredited status under 506(c)? https://www.hedgia.net/media/learn/p1.jpg It can. In March 2025, SEC staff said a high enough minimum can be a reasonable step to verify under Rule 506(c): at least $200,000 for a person or $1 million for an entity, plus written statements that the investor is accredited and that the money isn't financed by someone else, with nothing you know to the contrary. Below that, you verify the usual ways: tax returns, statements, or a letter from a CPA or lawyer. https://www.hedgia.net/media/learn/p1.mp4 39 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/can-you-switch-from-506c-back-to-506b Can I switch from 506(c) back to 506(b)? https://www.hedgia.net/media/learn/p2.jpg Not for the same offering. Once you generally solicit, such as a public post about the fund, that offering can't rely on 506(b), and every investor in it must be verified accredited under 506(c). Deleting the post doesn't undo it, because people already saw it. Decide which kind of raise you're running before the first post. https://www.hedgia.net/media/learn/p2.mp4 28 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/3c1-look-through-rule How can 96 investors count as 116 under 3(c)(1)? https://www.hedgia.net/media/learn/p5.jpg A 3(c)(1) fund can have at most 100 beneficial owners. If another fund owns 10% or more of your fund's voting securities, you count that fund's own owners instead of counting it as one. So a fund with 96 investors that takes in a 10% fund-investor with 20 owners counts 116 and loses the exemption. Similar funds you run can also be counted together. https://www.hedgia.net/media/learn/p5.mp4 36 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/hard-hurdle-vs-soft-hurdle What's the difference between a hard hurdle and a soft hurdle? https://www.hedgia.net/media/learn/p6.jpg Both set a return investors get before the manager shares in profits. With a soft hurdle, once the fund clears it, the manager's share applies to the whole gain; with a hard hurdle, only to the gain above it. If $100,000 earns $20,000 with a 5% hurdle, a 20% share is $4,000 under a soft hurdle and $3,000 under a hard one. https://www.hedgia.net/media/learn/p6.mp4 43 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/cftc-4-13-a-3-exemption When does a hedge fund need to deal with the CFTC? https://www.hedgia.net/media/learn/p7.jpg When it trades commodity interests. An option on the S&P 500 index is a security, regulated by the SEC; an option on S&P 500 futures is a commodity interest, regulated by the CFTC. Limited trading can stay exempt under CFTC Rule 4.13(a)(3): roughly, margin at most 5% of the fund or net notional at most 100%. The exemption must be reaffirmed with the NFA within 60 days after each year end, or it is withdrawn. https://www.hedgia.net/media/learn/p7.mp4 38 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/when-the-sec-regulates-fund-managers When does the SEC become a fund manager's regulator? https://www.hedgia.net/media/learn/p8.jpg It depends on assets under management. Under $100 million, the SEC generally won't register you; your state is the regulator, and many states exempt private fund managers. Many small fund managers still file part of Form ADV with the SEC as exempt reporting advisers, which is public, and anti-fraud rules apply. At $100 million you may register with the SEC, and most advisers must by $110 million. An adviser only to private funds stays exempt until $150 million, then registers with the SEC; after that, states generally take a notice filing. https://www.hedgia.net/media/learn/p8.mp4 51 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/sec-or-cftc-which-assets Which assets does the SEC regulate, and which does the CFTC? https://www.hedgia.net/media/learn/p9.jpg It depends on the wrapper, not the underlying. Securities, such as stocks, bonds, ETF shares and options on stocks or stock indexes, are the SEC's; so are security-based swaps on a single stock. Commodity interests, such as futures (including gold and currency futures), options on futures and most swaps, are the CFTC's. A gold ETF share is a security, while a gold futures contract is a commodity interest. Bitcoin futures are CFTC-regulated; whether other tokens are securities depends on the token. A fund that trades commodity interests may need to register its manager as a commodity pool operator unless an exemption applies. https://www.hedgia.net/media/learn/p9.mp4 55 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/different-fees-for-different-investors Can a hedge fund charge different investors different fees? https://www.hedgia.net/media/learn/p10.jpg Usually, yes, in two common ways. Share classes, such as a founders' class with lower fees, are open to anyone who meets that class's terms. A side letter is a private agreement with one investor for a lower fee or extra reporting. Fund documents should allow side letters and disclosures should describe them, and larger investors often ask for most-favored-nation rights. Every promise made this way has to be tracked. https://www.hedgia.net/media/learn/p10.mp4 37 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/ira-investors-in-a-hedge-fund Can an IRA invest in a hedge fund? https://www.hedgia.net/media/learn/p11.jpg Often, through a self-directed IRA with a custodian that holds private funds, but there are three catches. Prohibited transactions: your own or your family's IRA investing in a fund you run and are paid from can be self-dealing. Taxes: if the fund borrows to invest, the IRA can owe tax on that portion (UBTI). And the 25% line: if retirement accounts and plans own 25% or more of any class, the fund's assets can become plan assets under ERISA, making the manager an ERISA fiduciary. https://www.hedgia.net/media/learn/p11.mp4 44 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/trusts-and-companies-as-investors Can a trust or company invest in a hedge fund as an accredited investor? https://www.hedgia.net/media/learn/f9.jpg Yes, but the entity needs its own test, because the entity is the investor. A revocable trust its grantors can amend or revoke counts as accredited if every grantor is accredited. Other trusts need over $5 million in assets, can't be formed just to invest, and must have a sophisticated person directing the investment. An LLC or company qualifies with over $5 million in assets and not formed for the purpose, or when every owner is accredited. https://www.hedgia.net/media/learn/f9.mp4 43 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/fund-return-vs-broker-return Why is my fund's return different from my broker's? https://www.hedgia.net/media/learn/p12.jpg Usually because money came in at different times. Example: a $1 million fund gains 1% by August 13, falls 2% by the 20th, then a new investor adds $250,000 on the 21st and the fund climbs 3% to month-end. The investor who was in all month made 1.9% (+1%, −2%, +3%). The new investor skipped the drop and made 3%. The broker divides the account's gain by the average money in it, and more money was in for the best stretch, so it shows 2.5%. All three are right. Each investor's statement shows their own return, from the day their money came in, and fees come out after that. https://www.hedgia.net/media/learn/p12.mp4 55 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/performance-fee-crystallization How often can a hedge fund take its performance fee? https://www.hedgia.net/media/learn/p13.jpg As often as the documents say: this is called crystallization. Most funds take it once a year; some quarterly or monthly. It matters when returns bounce. If $100,000 gains $10,000 by June and then loses $5,000 by December, a yearly fee is 20% of the year's $5,000, or $1,000. With a June and a December fee, June's fee is 20% of $10,000, $2,000, and it isn't paid back when December falls. More frequent crystallization favors the manager, so investors read that term closely. https://www.hedgia.net/media/learn/p13.mp4 49 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/lock-ups-gates-and-notice What's the difference between a lock-up and a gate? https://www.hedgia.net/media/learn/p14.jpg A lock-up limits when each investor can leave: money stays in for a set time after investing, such as 12 months. A gate limits how much the whole fund pays out in one period, such as 25% of the fund per quarter; if requests exceed it, each investor usually receives the same share of their request and the rest waits. Notice is how far ahead investors must ask, often 30 or 60 days. Gates protect the investors who stay from a forced sale. https://www.hedgia.net/media/learn/p14.mp4 42 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/hedge-fund-k1-and-tax-return Who files a hedge fund's tax return, and what is a K-1? https://www.hedgia.net/media/learn/p15.jpg The fund does. A fund LLC with two or more owners is a partnership for tax: it files Form 1065 and usually pays no federal income tax itself. Each investor gets a Schedule K-1 showing their share of gains, losses and income, and reports it on their own return. For a calendar-year fund the return and K-1s are due March 15, or September 15 with an extension, so many investors extend too. The management company usually gets a K-1 for its share of profits. https://www.hedgia.net/media/learn/p15.mp4 41 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/promising-to-protect-capital Can a hedge fund manager promise to protect investors' capital? https://www.hedgia.net/media/learn/p16.jpg Only if it's really true, which for a hedge fund it rarely is. Anti-fraud rules apply to every adviser to a pooled fund, registered or not, and bar misleading statements to investors. A genuine goal described as a goal is fine; words like guaranteed, safe or can't lose invite trouble. Even a real backstop, such as the manager covering first losses, has to be written into the documents and be something the manager can pay. The offering memorandum describes the risks. https://www.hedgia.net/media/learn/p16.mp4 36 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/advanced/changing-fund-documents-after-launch Can I change my fund's documents after investors join? https://www.hedgia.net/media/learn/p17.jpg Before any investors join, usually yes. After, the operating agreement's amendment clause controls: changes that hurt investors usually need their consent, by a stated majority or sometimes each investor affected. Changes that only help investors are easier but still go in writing with notice. Every document has to match, the operating agreement, offering memorandum and side letters, and the operating agreement usually controls if they conflict, so amend it first. https://www.hedgia.net/media/learn/p17.mp4 37 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/performance-fee-tax-fund-vs-separate-account Is a performance fee taxed differently in a fund than in a separate account? https://www.hedgia.net/media/learn/r8.jpg Usually, yes. In a separate account, a $100,000 gain is taxed to the client, and a $20,000 performance fee is an advisory fee that individuals can't deduct: the deduction has been suspended since 2018, and the suspension is now permanent. In a fund taxed as a partnership, the fee is usually an incentive allocation of profit to the manager, so the investor is taxed on $80,000. The allocation keeps the gain's character; long-term treatment on it generally needs a holding period of more than three years. Illustrative, before tax. https://www.hedgia.net/media/learn/r8.mp4 42 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/one-fund-account-vs-many-separate-accounts Why run a strategy as a fund instead of separate accounts? https://www.hedgia.net/media/learn/r9.jpg A fund pools investors' money in one account: one order, one book, one track record. A small investor gets the same trades at the same price as a large one, and a new investor subscribes into the same account instead of opening a new one. Investors receive statements, not access to the brokerage account, so live positions stay private. https://www.hedgia.net/media/learn/r9.mp4 36 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/fund-investors-in-other-states Does an RIA have to register in every state its fund's investors live in? https://www.hedgia.net/media/learn/r10.jpg Generally not for the adviser. Federal law bars a state from requiring an adviser to register if the adviser has no place of business there and fewer than six clients there in the last 12 months. For that count, a fund is one client, and its investors aren't counted unless the adviser also advises them separately. The offering is separate: selling to investors in a state can still require a notice filing there. https://www.hedgia.net/media/learn/r10.mp4 35 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/custody-rule-annual-fund-audit Does advising my own fund mean an annual audit? https://www.hedgia.net/media/learn/r2.jpg For SEC-registered advisers, usually yes. Advising your own fund generally means custody, and the custody rule lets a fund meet it with an audit every year by an accountant registered with and inspected by the PCAOB. Audited statements go to investors within 120 days of year end, about April 30 for a December year end, or 180 days for a fund of funds, with a final audit when the fund winds down. https://www.hedgia.net/media/learn/r2.mp4 30 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/form-adv-changes-when-adding-a-fund What changes in Form ADV when an RIA adds a private fund? https://www.hedgia.net/media/learn/r4.jpg About nine items of the Part 2A brochure typically change: Item 4 (services), 5 and 6 (fees and performance pay), 7 and 8 (clients and strategy), 10 and 11 (affiliations and conflicts), 12 (brokerage) and 15 (custody). Schedule D gets an entry for the fund with its own private fund ID. The annual update is due within 90 days of year end, and clients get the brochure or a summary of changes within 120. https://www.hedgia.net/media/learn/r4.mp4 34 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/who-files-form-pf Do I have to file Form PF? https://www.hedgia.net/media/learn/r5.jpg Only if two things are true: you're registered with the SEC, and you manage $150 million or more in private fund assets. State-registered advisers don't file it, and neither do SEC-registered advisers below $150 million. Those who qualify file at least once a year, so most first funds don't file. https://www.hedgia.net/media/learn/r5.mp4 29 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/avoiding-double-fees-for-ria-clients-in-your-fund How do RIAs avoid charging clients twice when they invest in the RIA's own fund? https://www.hedgia.net/media/learn/r6.jpg If you charge 1% on a client's whole account and your fund charges 2% on the part invested in it, the same dollar pays 3%. Common ways out: leave fund assets out of the advisory bill, offset one fee against the other, or put clients in a lower-fee class. Pick one before clients invest, and spell it out in your brochure. https://www.hedgia.net/media/learn/r6.mp4 36 2026-10-15 2026-10-15T00:00:00.000Z monthly 0.7 https://www.hedgia.net/learn/rias/cross-trades-and-principal-trades When does a cross trade become a principal trade? https://www.hedgia.net/media/learn/r7.jpg When your firm and its affiliates own more than 25% of the fund on one side, SEC staff treat a trade between that fund and another client like trading for your own account: a principal trade. 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