Legal structure of the hedge fund. Here are definitions of the possible structures:
4Closed End Investment Company
Has a fixed number of shares outstanding. The price of a share in a closed-end investment company is determined entirely by market demand, so shares can either trade below their net asset value (at a discount) or above it (at a premium).
A corporation is a legal entity created under the laws of a state to carry on some business or other authorized activity. The principal distinction between a business corporation and other forms of business organization (i.e., proprietorship or partnership) is the fact that the liability of the owners is limited to the capital of the subject corporation.
4Exempted Limited Partnership
Limited Partnerships are types of partnerships (often domiciled in the United States) which are comprised on one or more general partner(s) who manage the business, and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but who take no part in running the business and incur no liability with respect to partnership obligations beyond contribution.
4Limited Liability Company
An LLC combines the most attractive features of limited partnerships and corporations. The members of an LLC enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership.
4Master Feeder Fund
Involves a master trading vehicle that is domiciled offshore. The master fund typically has two investors: another offshore fund, and a US (usually Delaware) Limited Partnership. These two funds are the feeder funds. Investors invest in the feeder funds, which in turn invest all the money in the Master fund, which is traded by the manager. It is also possible that the feeder fund may have two or more share classes in different currencies being traded within the master portfolio.
4Open End Investment Company
Open-end funds do not have a fixed number of shares or investors. They sell new shares and redeem existing shares for investors every day, causing net assets to fluctuate--often wildly--even if the NAV is not changing much.
This type of partnership allows less than 100 investors.
This type of partnership allows up to 500 investors.
Stands for Soci�t� d'investissement � capitale variable. Sicav are structured as companies and are a common fund structure in Luxembourg. Sicav are similar to the OEICs found in the UK or VCIC (variable capital investment companies).
A legal structure which does not fit into any of the other categories.