Hedge Fund Structure

Consist of Master Fund, which is responsible for investing in different asset classes
ranging from stocks, bonds, to complex financial instruments such as MBSs and CDOs
and offshore or onshore funds that are primarily responsible for pooling/raising capital
from various investors, which are then transferred to the master fund which is ultimately
responsible for investing.

Its about NAV (difference between Assets and Liabilities);

Beginning NAV + subscriptions redemptions portfolio P&L fund expenses
management fees distribution = ending NAV

P&L is consisted of allocated income/loss, management fee accrual, admin fee accrued,
other fees accrued, and incentive fee accrued.

Management fee varies depending on the class share, which could be 0.75% of NAV
accrued on a daily basis for daily funds, payable on a quarterly basis

Incentive fee could be 20% of the NAV in addition to high water mark restriction
depending on the share class

Investments: stocks, bonds, derivatives

PE Funds
ASC 820 Fair Value Measurements and Disclosures

http://www.axial.net/forum/primer-structure-private-equity-firms/

Private-equity firms ("PE") are formed by investors who want to directly invest in other
companies, rather than buying stock. They usually buy the whole company. Investors in
private equity funds include some of the nation's largest pension funds and endowments,
as well as individual wealthy investors

The private equity firm is typically made up of limited partners (LPs pension funds,
insurance companies, endowments funds) and general partners (GPs, aka financial
sponsor, which is a private equity firm that engages in leveraged buyout transactions).

The LPs are the outside investors. They provide the capital and typically consist of
institutional investors such as insurance companies, endowment funds

Return% = portfolio P&L today /(NAV after management fee - yesterday +

(+subscription-redemption-today)

GPs are the professional investors (like Blackstone, KKR) who manage the private equity
firm and deploy the pool of capital

Most private equity funds are organized as limited partnerships or limited liability
companies and have a finite life (usually 10 years)

The GPs charge a management fee from the LPs capital contribution/commitment to
cover the operating expenses of the firm