Sample Hedge Fund Business Plan Template


Whenever financial investments are being discussed, hedge funds usually come to mind.

However, hedge funds have become often-used words to the extent where a lot of people have heard about it but only a few know what it really means.

So then what are hedge funds? This is an investment strategy which involves pooling capital from institutional investors as well as accredited individuals. These are invested in a variety of assets.

You can start your own hedge fund and ultimately managing other people’s investments.

However, to achieve this, you need to have the expertise.

Starting a hedge fund business will require you to register with a fund as the general partner. Other investors will have to take the position of limited partners.

Here is a sample business plan for starting a hedge fund manager business.

Step 1: Knowing the Basics of the Trade

Hedge funds are known to capitalize on leverage. Leverage may also be termed borrowed money as it allows you to manage larger contracts. An attraction for hedge funds is that you could easily profit from major markets such stocks, currencies, as well as bonds among others. Here, being an experienced financial advisor can be of immense advantage as you could easily float your own hedge fund. However, the major requirement is the funding. Hedge funds normally start with a minimum of $1 million.

Step 2: Your Trading Strategy Matter

Consistently successful hedge fund managers are those who have understood what works and what does not. In fact, different hedge fund managers have different strategies. Hence no strategy can be said to be better than the other. It all boils down to which strategy fits your personality. Hence it is important that you select a hedge fund strategy you are most comfortable with.

With significant investments on the line, it is necessary that you use what has always worked for you. The best hedge fund strategies are those which will maximize profit potentials while reducing the volatility of an asset.

In plain terms, you may sell high-velocity stocks while buying low-velocity securities. This ensures that the gain in one would be much higher and therefore offset losses in the other. Your chosen strategy would determine how successful your hedge fund becomes.

Step 3: Choosing a Business Entity

Every state’s department of commerce has its own regulatory laws regarding the creation of business entities.

However, the common ones include Trusts, Limited Liability Companies (LLC), and Limited Liability Partnerships. Wherever your Hedge fund will be located, you need to conduct a research on the requirements for starting one as well as the benefits accruing to each. Limited Partnerships are most common for Hedge funds. As mentioned earlier on, the investors here make up the limited partners while the hedge fund advisor takes the position of a general partner.

Step 4: Hiring the Services of a Legal Advisor or Law Firm

Having legal advice from financial experts is of utmost importance here. It is highly recommended that you do not handle this step with laxity as any paperwork not carefully done may come back to harm the business in future. The quality of your legal team will determine how well the job is done.

Your legal team should be able to demonstrate a total understanding of financial laws. You may want to ask about previous services rendered to other clients as a way of cross-checking their capacity to deliver.

Step 5: Hiring Your Team of Experts

As a hedge fund, you need to be able to start your business on a strong footing. Hence to achieve this, you need a team of reliable hands. These must be persons with proven track records with impressive years of service in the financial sector. These should be able to share your vision and bring their years of experience to bear on the job.

With a committed and dedicated team, you would have solved a huge problem by infusing experience and credibility necessary for attracting investors.

Step 6: Choosing a Name for Your Mutual Fund

This is a necessary step which has an impact on the message your hedge fund conveys. The name you choose for your mutual fund should be able to convey your philosophy or in other words what the business stands for. You may want to do a little research to select a perfect name for your fund by conducting a web search as well as asking friends and family. Your chosen name should be registered with the relevant authorities.

Step 7: Obtaining an Employer Identification Number

The Employer Identification Number is also known as the EIN is a tax identification number issued by the Internal Revenue Service. You are not required to pay for obtaining the EIN. However, you would need to fill in the necessary paperwork on its website or you may visit any of its offices nearest to you. There are IRS offices spread across all the states as well as major cities. You can easily walk into any to find out details if you prefer this option.

Starting a hedge fund is a process that needs diligence and patience. You should be able to follow every procedure without skipping any. Also as mentioned earlier, the professional legal advice is of utmost importance to establish a hedge fund. This enables you to avoid any legal troubles that may arise with shabby paperwork.


  • Executive Summary
  • Business Objectives
  • Mission Statement
  • Products and Services
  • Market Analysis
  • Sales and Marketing Strategy
  • Management Summary


JJ and Associates LLP is a standard hedge fund company that gives big time investors and well established institutions an opportunity to pool cash together in order to be able to invest in securities as well as every other form of investment opportunities that requires large capital for start up.

It is no secret that there are lots of entrepreneurs searching for large capital to startup their businesses.

There are also others who have large amount of cash and are looking for a means to invest such. This need will be taken care of by a hedge fund firm.

JJ and Associates LLP, will be made up of a management team that is well experienced in the investment field and also of people who are core professionals.

Business Objectives
At JJ and associates, our objectives are pretty straight forward.

• To become the leading hedge fund firm in America that caters to the needs of major investors and other entrepreneurs
• To develop into a large scale investment firm that will provide our clients dividend income and capital appreciation.
• To build a firm that is efficient in providing its investors and senior directors with attractive interest income.


Our mission is to offer clients which include investors and partners with the best investment services out there in order to stand out as leading partners in the investment sector.


At JJ and Associates, we will solicit capital from accredited investors and then make use of such investments to invest in marketable securities and other hedge funds. We expect to generate an annual compound return of 30% to 35% per year on the capital invested into JJ and Associates’ portfolio holdings. JJ and Associates management will retain a 25% ownership interest in the firm.

We would also invest in marketable securities as well as other hedge funds that specialize in specific aspects of trading. Other methods of trading including options trading and LEAP trading will be employed in conducting our business.

Market Trends

Research has shown that the headquarters of most of the top hedge fund firms is in New York. New York is seen as the headquarters of most businesses around the world. In fact most key business decisions are taken in New York.

Core professionals in the management team is an important requirement in starting an hedge fund firm as is seen in almost all hedge fund companies.

It has also been observed that most hedge fund companies place a limit on the amount of capital they accept over time. This is done in order to limit the amount of capital they can employ successfully before the returns start diminishing.

Target Market

When it comes to hedge fund companies, one thing is always common and that is the fact that it is a company meant for the rich and accredited investments. This is because of the large capital involved in it.

Hence, as a hedge fund company, we are only open to limited partners who have the required capital for such capital intensive portfolios.

We this in mind, we have specifically designed our products and services for the list of individuals and organizations below.

• Rich people
• Accredited investors and investment clubs
• Top corporate bodies
• Other corporate organizations


The fact that there exists a stiff competition among hedge fund managers and even with other financial service providers in the United States is not lost on us. With this in mind, we have employed an efficient and experienced team to handle our sales and marketing.

JJ and Associates sales and marketing team will comprise of only those who have vast experience in the field in order to be able to meet with the goals of the organization. Our team will also be trained on a regular basis in order to keep them refreshed and up-to-date.

At JJ and Associates, we have developed some marketing strategies to help us meet our goal of becoming among the leading hedge fund companies in America. These strategies are stated below

• Using maximum use of social media by introducing our business on every available avenue.
• Sending introductory letters as a means of introducing our business to corporate organizations, accredited investors, top corporate executives and key stake holders in and around New York City as well as other cities in the United States
• Advertise our business in online platforms and other important business related journals, newspapers, TV stations, and radio stations.
• Attend international and local finance and business expos that are relevant to hedge fund business including, seminars, and business fairs
• Engage in word of mouth marketing as well as direct marketing approach


JJ and Associates LLP will comprise of a management team of made up of professionals with a minimum of 10 years experience in the investment sector. JJ and Associates LLP’s management team will be headed by Jacob Justin who has spent years working as an investment banker in New York.

We will endeavor to employ capable and trustworthy hands in order for us to be able to achieve our goals as a hedge fund firm.


This above business plan for JJ and Associates LLP will serve as a basis for achieving JJ and Associates’ short and long term goals in the hedge fund investment sector. The founders of JJ and Associates LLP have it in mind that this hedge fund business plan is subject to change, in order to be able to accommodate any changes that might occur in the investment sector anytime soon.

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