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
- Hedge Fund Structures
- Management Fees
- Performance Fees
- Hurdle – Soft and Hard
- Highwater Mark
- Hurdle and Highwater Mark
- Tiered Incentive Fees
- Index Based Fees
- Claw back
- Modified Incentive Fees
- Performance Return Calculation
- Side letter
- Side pocket
- Share Class and Series
- Capital Activities
- Ownership Percentage
- Income allocation process
- New Issue Income allocation
- Special Allocation
Learning Objectives
- Explore the definition and broad structure of a hedge fund as an investment vehicle
- Recognize fundamentals of funds set up as different legal entity types
- Explain 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
- Recognize advanced concepts of performance and management fees
Level
Advanced
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours), 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
Investors Allocation for Hedge Funds
Advance Preparation
None
Instructor
Rita BasuMallick
CPA, MBA, CA
Rita is a CPA with over 17 years of experience in investment accounting , middle office operations and fund administration, including roles at State Street, SS&C Technologies, Linedata and PwC. Her CPE courses focus on hedge fund structures, portfolio accounting systems, valuation of complex financial instruments, and regulatory reporting. Backed by an MBA in Financial Markets from NYU Stern and Chartered Accountant credentials from India, she brings real-world expertise with instructional clarity.