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Overview
Domestic Hedge Fund Start-Up
Emerging Manager Program
Private Equity Fund Start-Up

Overview
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Untitled Document
Private Equity Fund Start-Up Checklist
General Procedures
  • Clarify your investment strategy and your unique edge
  • Develop a business plan, including cash flow projections and a timetable for execution
  • Select external consultants: attorney, independent accountant and industry consultants
  • Prepare Executive Summary and basic Term Sheet
  • Select a name for the operating entities (general partner/managing member/investment manager) and the fund
  • Select members of management team (Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Compliance Officer, etc.) including outsourcing services
  • Set-up shop: banking relationships, office space, business equipment, staffing, IT/website, etc.
  • Structure compensation, profit sharing, and retirement plans
  • Consider disaster recovery plans
  • Consider forming an Advisory Board
  • Purchase adequate business, life and health insurance
Preparatory Steps
  • Determine legal entity and appropriate jurisdictions
      • “Blue sky” laws
      • Potential registration
  • Specify structure and term of investment entity
  • Prepare legal documents
      • Private Placement Memorandum, Limited Partnership Agreement, Articles of Association, Operating Agreement
        • Capital commitments (and consequences for default)
        • Capital Calls
        • Distributions
      • Subscription Agreement and Partnership Questionnaire
  • Consider provisions for
      • Book and tax allocations
      • Management fee
      • Carried interest
      • Hurdles/preferred returns
      • Claw-back clauses (escrow or guaranty provisions)
  • Establish compliance, risk and valuation guidelines
Document Review
  • Offering Memorandum
  • Subscription Agreement
  • Partnership Agreement
  • Custody Agreement
  • Compliance, Risk and Valuation Guidelines and Manuals
  • Due Diligence Questionnaire
  • Marketing and Website Materials
Private Investment Forum
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