The Fundamentals of Hedge Fund Management, 2nd Edition

CHAPTER 5

ERISA, UBTI, and Offshore Funds

At cocktail parties, you will introduce yourself as a hedge fund manager. From here to eternity, you will do the same at any social event. It will become your moniker and your persona. It is your identity, and you will like it, be proud of it, and wear it on your sleeve like a red badge of courage.

A hedge fund manager is what you have become, and you will tell people with pride and vigor. You will be happy as long as you raise a lot of money and your fund performs well. If your fund raises no money and its performance is lousy, then you will be telling people you are looking for a job. Just because you launch a fund doesn't mean it will be immediately successful. It takes a lot of work, hard work in operations, portfolio management, and fundraising to make the machine tick.

To go out on your own is an accomplishment, and you should be proud you are making the leap into entrepreneurship. Be proud of this accomplishment. Being an entrepreneur is hard. To step out of the corporate world and solely rely on yourself and your own organization is difficult. Most people can't do this, so you should be proud of this accomplishment. Remember, however, that humility is a good thing. When push comes to shove, you are the same as any other entrepreneur, be it the guy who owns the shoe store or the gal who owns the dry cleaner. All of you have something in common: the hope and prayer your business will survive.

As I stated in previous chapters, most ...