A primer on structuring registered funds of hedge funds

Although hedge fund and similar products once were offered solely or primarily to sophisticated institutional investors and very wealthy individuals, there now appears to be an increasing demand for them by a broader segment of the investing public. There are , however, significant legal restrictions that greatly limit the ability of financial institutions to offer and sell these products directly to a large number of investors. A number of financial services firms therefore have been exploring ways to indirectly offer hedge finds to a broader base of their customers. A number of these firms have formed or are considering forming closed-end funds that will invest in hedge funds.