Accounting for Investors Allocation for Hedge Fund
Author: Rita BasuMallick
| CPE Credit: |
2 hours for CPAs |
This course offers an overview of hedge fund structures, and income allocation to fund’s investors. We will touch upon basic concepts of type of funds, investors, share classes, capital activities, fees structures and step by step approach to process economic distribution of income.
Publication Date: June 2025
Topics Covered
- Fund Structures
- Legal Entity
- Investors
- Share Class
- Capital Activities
- Ownership Percentage
- Income allocation process
- New Issue Income
- Fees Structure
- Highwater Mark
- Hurdle Rates
- Side pocket investments
- Series Accounting
- Audit Holdback
Learning Objectives
- State the definition and broad structure of a hedge fund as an investment vehicle
- Recognize fundamentals of funds set up as different legal entity types
- State the concept of ECDI and steps involved in income allocation to investors
- Recognize key elements of fees charged to investors
- Recognize the impact of capital activities on ownership percentages
- Recognize concept of side pocket investments
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Accounting (1 hour), Auditing (1 hour)
Program Prerequisites
Basic knowledge of Accounting (Journal entries, Trial Balance), Basic understanding of how security investment works, Fundamentals of Hedge Fund NAV Accounting
Advance Preparation
None
