 |
|
|
|
|
Lipper HedgeWorld's Education Center
Domestic Vs. Offshore Funds
|
Domestic vs. Offshore Funds
What are some characteristics that differentiate offshore from domestic hedge funds?
- Offshore funds are typically more liquid than domestic funds.
- Offshore hedge funds are usually structured as corporations, not limited partnerships.
Therefore, offshore hedge funds potentially have an unlimited number of investors.
- Offshore hedge funds are valued as NAV (net asset value), not as account balances, as
domestic funds are valued.
- There are no generally accepted accredited investor requirements for offshore funds.
- US individuals are not permitted to invest offshore, unless they have legally established
an offshore trust or purchase offshore life insurance.
- Each offshore venue (where the hedge fund resides) has its own rules that need to be
understood in detail.
- Each offshore domicile (where the investor resides) has its own rules that limit the
activities of prospective investors into offshore funds and that need to be understood in
detail.
- Many tax-free US entities can invest in offshore funds. Some of these include endowments,
ERISAs, IRAs, and foundations.
|
|
|
|
|
|
|
|
