For Hedge Funds using Interactive Brokers as their principal prime broker, the Hedge Fund Marketplace allows Fund Managers to market their funds to other IBKR customers who are Accredited Investors and Qualified Purchasers. IBKR’s Hedge Fund Marketplace is an online version of a traditional Capital Introduction program.
The Hedge Fund Marketplace is part of IBKR’s Investors’ Marketplace and is provided free of charge to all Hedge Funds who meet the following criteria:
- IBKR is their principal Prime Broker
- Have at least $3 million in assets under management
- Have an audited track record of at least one year or have done its trading at IBKR for the last year.
In addition to the required eligibility criteria, IBKR requires the Fund or Fund Family to have a Third-Party Administrator as well as proof of commitment from an accountant or auditing firm to prepare audited financials for the fund(s) for the following year.
Hedge Funds who wish to participate can apply to the program from their Portal by clicking the Head & Shoulders icon in the upper right corner, followed by Settings. Underneath the Investors’ Marketplace section, click Advertise Services. Underneath the Investing section, select Hedge Funds and follow the onscreen instructions to complete the Hedge Fund Capital Introduction Program (HFCIP) application.
Once the application has been completed and the required documentation has been uploaded, IBKR’s Compliance Department will review the application and the fund’s trading history, investment strategy/objectives, regulatory/legal history, and registration status. The Fund Management entity will also be reviewed including searches on the company, contact person and officers/directors, and third-party professionals.
IBKR’s Hedge Fund Marketplace (for participating Hedge Funds and participating investors) is accessed through a separate, secure, and password-protected area of the Interactive Brokers website. The Hedge Fund Marketplace is designed to comply with SEC rules limiting solicitation for private placements.
Participating Hedge Funds can post basic information about the Fund, the Fund Manager and the Fund strategy. Potential investors can view and download related documentation, including private placement memoranda and subscription information, and they can contact the Fund Management company directly through the Marketplace or request that the Fund contact them.
For more information on IBKR’s Hedge Fund Marketplace, please see our website and user guides.
Disclosure: Interactive Brokers
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.
Disclosure: Hedge Funds
Hedge Funds are highly speculative, and investors may lose their entire investment.