Hedge Fund Business Plan
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Executive Summary
Business Overview
LeadingEdge Capital is a startup hedge fund company located in Boston, Massachusetts. The company was founded by Robert Wilkens and Stuart Rosenberg, proven strategists of high value investments in their former employment roles as hedge fund managers. Robert Wilkens was a hedge fund manager for fifteen years, building the portfolios of his clients to over 45M within that time. Stuart Rosenberg, a hedge fund manager for thirteen years, built his clients portfolios to over 25M within the years of his employment.
With the breakup of the ownership in their former employment, Robert and Stuart have determined this is the right and best time to open their own hedge fund company. Located in Boston, Massachusetts, a geographic area housing an abundance of serious investors, the new partners believe their former clients will support and invest in the new hedge fund. Toward that end, Robert and Stuart are starting to contract with those clients before the launch of LeadingEdge Capital.
Product Offering
The following are the services that LeadingEdge Capital will provide:
- Proven strategies for significant investment returns
- Deep and thorough market analysis using proprietary tech tools
- Unique client evaluation tools to assess risk appetite
- Thorough market analysis and reports
- Fund evaluation and administration
- Advanced technologies to monitor risk
- Data analysis to support profitable trading opportunities
- Day to day fund management
Customer Focus
LeadingEdge Capital will target all former clients of the prior employer. They will target investors from the Boston area and surrounding region. They will target risk-averse investors in the region. They will target clients at events, through networking opportunities, and industry associations. They will lead and speak at industry and investor events. They will educate potential investors via a unique set of educational video presentations at their website.
Management Team
LeadingEdge Capital will be co-owned and operated by Robert Wilkens and Stuart Rosenberg. They have recruited former associates from their prior employment to join their launch. This includes Mark Tompkins, who will act as the third-party fund administrator, Terry Camden, the independent certified public accountant, Tami Watson, the custodian, and Larry Lawson, the on-call attorney for LeadingEdge Capital.
Robert Wilkens holds a master’s degree in business administration from Harvard University. He is known as a brilliant strategic fund manager and has a wide circle of investors who rely on his capabilities to assess risk and manage the growth of their funds. Stuart Rosenberg is particularly gifted as a leader who can assist risk-averse investors with trust-building tools he built into a proprietary client app. The app helps investors see and track daily market activities and it ties global and national events to those activities to inform the client of a full-picture reason for the fund’s daily performance.
The remaining team members consist of: Mark Tompkins, who will act as the third-party fund administrator, Terry Camden, an independent certified public accountant, Tami Watson, the hedge fund custodian, and Larry Lawson, the on-call attorney for LeadingEdge Capital.
Success Factors
LeadingEdge Capital will be able to achieve success by offering the following competitive advantages:
- Friendly, knowledgeable, and highly-qualified team of LeadingEdge Capital
- Comprehensive menu of services, including educational webinars for new investors
- Proprietary app that assists managers and investors in making key decisions
- Compelling data analysis program to support profitable trading opportunities
- LeadingEdge Capital will offer discounted rates for “anchor investors” during the first six months of the establishment process. This is limited to 100 investors and includes on-going low percentage rates overall for the first-in investor pool.
Download the Hedge Fund business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
LeadingEdge Capital is seeking $200,000 in debt financing to launch its LeadingEdge Capital. The funding will be dedicated toward securing the midtown Boston office space and purchasing office equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs for the marketing and networking fees and costs. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph outlines the financial projections for LeadingEdge Capital.
Company Overview
Who is LeadingEdge Capital?
LeadingEdge Capital is a newly established full-service hedge fund company in Boston, Massachusetts. LeadingEdge Capital will be the most reliable, cost-effective, and efficient choice for investors in Boston and the surrounding communities. LeadingEdge Capital will provide a comprehensive menu of educational, investing, managing and assessment services for any client to utilize. Their full-service approach includes a comprehensive proprietary app and unique tools that are exclusive to LeadingEdge Capital.
LeadingEdge Capital is projecting at least one hundred clients within the first year of business. The team of professionals are highly qualified and experienced in hedge funds and all the permutations and regulations, and have strategic methods to find and evaluate new opportunities. LeadingEdge Capital provides an high-value investment process that will build their clients’ portfolios extensively through years of the best customer service from LeadingEdge Capital.
LeadingEdge Capital History
LeadingEdge Capital is a startup hedge fund company founded by Robert Wilkens and Stuart Rosenberg, proven strategists of high value investments in their former employment roles as hedge fund managers. Robert Wilkens was a hedge fund manager for fifteen years, building the portfolios of his clients to over 45M within that time. Stuart Rosenberg, a hedge fund manager for thirteen years, built his clients portfolios to over 25M within the years of his employment.
With the breakup of the ownership in their former employment, Robert and Stuart have determined this is the right and best time to open their own hedge fund company. Located in Boston, Massachusetts, a geographic area housing an abundance of serious investors, the new partners believe their former clients will support and invest in the new hedge fund. Toward that end, Robert and Stuart are starting to contract with those clients before the launch of LeadingEdge Capital.
Since incorporation, LeadingEdge Capital has achieved the following milestones:
- Registered LeadingEdge Capital, LLC to transact business in the state of Massachusetts.
- Has a contract in place at a midtown Boston office building with 10,000 square foot space for offices and client waiting areas.
- Reached out to numerous former clients to engage them with the new LeadingEdge Capital hedge fund.
- Began recruiting a staff of managers, associated professionals and office personnel to work at LeadingEdge Capital.
LeadingEdge Capital Services
The following will be the services LeadingEdge Capital will provide:
- Proven strategies for significant investment returns
- Deep and thorough market analysis using proprietary tech tools
- Unique client evaluation tools to assess risk appetite
- Thorough market analysis and reports
- Fund evaluation and administration
- Advanced technologies to monitor risk
- Data analysis to support profitable trading opportunities
- Day to day fund management
Industry Analysis
The hedge fund investment industry is expected to grow during the next five years to over $123 billion.
The growth will be driven by more investors seeking the resilient hedge fund market.
The growth will also be driven by continued hedge fund interest driven by consumers who want to learn about the process and are eager for education.
The growth will be driven by a greater use of technology to provide lower-risk options for investment that continually bring returns.
Costs will likely be reduced as hedge fund managers lower fees to accommodate early entry investors.
Costs will also likely be reduced as hedge fund managers continue to have increased access to retail investors.
Download the Hedge Fund business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
LeadingEdge Capital will target all former clients of the prior employer. They will target investors from the Boston area and surrounding region. They will target risk-averse investors in the region. They will target clients at events, through networking opportunities, and industry associations. They will lead and speak at industry and investor events. They will educate potential investors via a unique set of educational video presentations at their website.
The precise demographics for LeadingEdge Capital are:
| Total | Percent | |
|---|---|---|
| Total population | 1,680,988 | 100% |
| Male | 838,675 | 49.9% |
| Female | 842,313 | 50.1% |
| 20 to 24 years | 114,872 | 6.8% |
| 25 to 34 years | 273,588 | 16.3% |
| 35 to 44 years | 235,946 | 14.0% |
| 45 to 54 years | 210,256 | 12.5% |
| 55 to 59 years | 105,057 | 6.2% |
| 60 to 64 years | 87,484 | 5.2% |
| 65 to 74 years | 116,878 | 7.0% |
| 75 to 84 years | 52,524 | 3.1% |
Customer Segmentation
LeadingEdge Capital will primarily target the following customer profiles:
- Former clients at prior employment
- Potential investors at networking events, industry relationships
- Potential Risk-averse investors who can rely on technology at LeadingEdge Capital
- Potential investors who are seeking self-education via webinars
- Potential investors who choose technology as a main driver for decision-making
Competitive Analysis
Direct and Indirect Competitors
LeadingEdge Capital will face competition from other companies with similar business profiles. A description of each competitor company is below.
One Star Capital Partners
One Star Capital Partners has been in business in the Boston area for over seventy-five years. The current partners are the children and grandchildren of the original founders of the hedge fund business. The investor portfolio of One Star Capital Partners is a combined 210B, which has been produced via the past several years of wealth-building and wealth-creation for their clients. The company has experienced a loss of clients during the past five years, however, as the descendents of the original partners have been engaged in litigation regarding the ownership percentages of the privately-held company. This has led to some discouragement from clients and organizational changes that are difficult to understand or explain.
The promise of One Star Capital Partners is to build wealth through secure investor commitments that total as much or more than the previous years. The company has led investors toward a global macro investing environment which didn’t prove to be compatible with the event-driven model of prior years. This shift created a net loss of investors during the past five years, although forward-looking statements have recently been made during investor phone calls.
AlphaDrive & Company
With a golfer’s nomenclature and several clients directed into the golf, tennis and soccer investment categories, AlphaDrive & Company are becoming an established hedge fund after the introduction of the company in 2020. The hedge fund is fairly small, with a combined portfolio of all managers standing at 20M in 2023, the fund promises to expand and increase opportunities for investors to explore all sectors of the sports arena, finding attractive potential for earnings among their clientele. One of the unique aspects of this company is that it was founded by two famous golf celebrities and those relationships allow investors to enter the pro am golf tournaments throughout the world. Similar relationships and capabilities allow sports enthusiasts to meet their “favorite” athletes to join in activities as a result of investing with AlphaDrive & Company.
Howard & Howard Capital
Howard & Howard is a Boston-based hedge fund that was established in 2005. It is owned and operated by a father-son investment team. The company focuses on real estate conglomerates, REITS, distressed properties, and other lucrative real estate opportunities that are ripe for investment. The hedge fund represents those who believe their best returns will always come from land or the acquisition of real estate and are willing to invest significant sums of money in appropriate low-risk, high-return ventures.
Robert Howard is the president of Howard & Howard Capital, while his son, Thomas Howard is the vice president of the company. Their office building is situated on the harborside of Boston, amid brick-lined walkways and older buildings indicative of early Boston. This feature attracts the potential investors who appreciate the heritage and value of land, especially land that is situated in the Massachusetts region. Investment opportunities include major retail outlets, farm and ranch land, undeveloped residential areas, and other land-based opportunities.
Download the Hedge Fund business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
LeadingEdge Capital will be able to offer the following advantages over their competition:
- Friendly, knowledgeable, and highly-qualified team of LeadingEdge Capital
- Comprehensive menu of services, including educational webinars for new investors
- Proprietary app that assists managers and investors in making key decisions
- Compelling data analysis program to support profitable trading opportunities
- LeadingEdge Capital will offer discounted rates for “anchor investors” during the first six months of the establishment process. This is limited to 100 investors and includes on-going low percentage rates overall for the first-in investor pool.
Marketing Plan
Brand & Value Proposition
LeadingEdge Capital will offer the unique value proposition to its clientele:
- Highly-qualified team of skilled employees who are able to provide a comprehensive set of select investment opportunities to current and potential investors.
- Proprietary app that assists managers and investors in making key decisions
- Educational webinars via the website for “introductory” investors
- Discounted rates for “anchor investors” for first 6 months of business
Promotions Strategy
The promotions strategy for LeadingEdge Capital is as follows:
Word of Mouth/Referrals
LeadingEdge Capital has built up an extensive list of potential years from prior years of the former hedge fund that employed the founders of LeadingEdge. The former employer is now defunct, which indicates a wide swatch of investors who require a new, fresh set of opportunities to be garnered by the well-known and personable staff of LeadingEdge Capital. Having produced multiple opportunities and millions of dollars of profit with the former hedge fund managers, the former clients are eager to get in on the “anchor investor” program and start earning returns on investments once again.
Professional Associations and Networking
The owners of LeadingEdge Capital will continue extensively networking, attending and speaking at engagements that include current and potential investors. The company has plans to attend national conferences and exhibit at trade shows, where introductory materials can be offered to new investors just entering the market.
Website/SEO Marketing
LeadingEdge Capital will fully utilize their website. The website will be well-organized, informative, and list all the services that LeadingEdge Capital provides. The website will also list their contact information and testimonials from current and former clients. The website will have SEO marketing tactics embedded so that anytime someone types in the Google or Bing search engine “hedge fund company” or “hedge fund company near me”, LeadingEdge Capital will be listed at the top of the search results.
Pricing
The pricing of LeadingEdge Capital will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
Operations Plan
The following will be the operations plan for LeadingEdge Capital.
Operation Functions:
- Robert Wilkens will be the co-owner and President of the company. He will oversee and manage client relations, investor recruitments and forward-looking opportunities.
- Stuart Rosenberg will be the co-owner and Vice President of the company. He will oversee the technological research and development for the company.
- Mark Tompkins will be the third-party fund administrator.
- Terry Camden will be the independent certified public accountant assisting the company
- Tami Watson will be the Custodian of LeadingEdge Capital, assisting the company
- Larry Lawson will be the on-call Attorney for LeadingEdge Capital.
Download the Hedge Fund business plan template (including a customizable financial model) to your computer here <–
Milestones:
LeadingEdge Capital will have the following milestones completed in the next six months.
- 5/1/202X – Finalize contract to lease office space
- 5/15/202X – Finalize personnel and staff employment contracts for the LeadingEdge Capital
- 6/1/202X – Finalize contracts for LeadingEdge Capital clients
- 6/15/202X – Begin networking at industry events
- 6/22/202X – Begin moving into LeadingEdge Capital office
- 7/1/202X – LeadingEdge Capital opens its office for business
Management Team
LeadingEdge Capital will be co-owned and operated by Robert Wilkens and Stuart Rosenberg. They have recruited former associates from their prior employment to join their launch. This includes Mark Tompkins, who will act as the third-party fund administrator, Terry Camden, the independent certified public accountant, Tami Watson, the custodian, and Larry Lawson, the on-call attorney for LeadingEdge Capital.
Robert Wilkens holds a master’s degree in business administration from Harvard University. He is known as a brilliant strategic fund manager and has a wide circle of investors who rely on his capabilities to assess risk and manage the growth of their funds. Stuart Rosenberg is particularly gifted as a leader who can assist risk-averse investors with trust-building tools he built into a proprietary client app. The app helps investors see and track daily market activities and it ties global and national events to those activities to inform the client of a full-picture reason for the fund’s daily performance.
The remaining team members consist of: Mark Tompkins, who will act as the third-party fund administrator, Terry Camden, an independent certified public accountant, Tami Watson, the hedge fund custodian, and Larry Lawson, the on-call attorney for LeadingEdge Capital.
Financial Plan
Key Revenue & Costs
The revenue drivers for LeadingEdge Capital are the investment fees they will charge to the investor clients for their services.
The cost drivers will be the overhead costs required in order to staff LeadingEdge Capital. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.
Funding Requirements and Use of Funds
LeadingEdge Capital is seeking $200,000 in debt financing to launch its hedge fund company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the events and association memberships. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
Download the Hedge Fund business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Clients Per Month: 175
- Average Fees per Month: $125,000
- Office Lease per Year: $100,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Hedge Fund Business Plan FAQs
What Is a Hedge Fund Business Plan?
A hedge fund business plan is a plan to start and/or grow your hedge fund business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Hedge Fund business plan using our Hedge Fund Business Plan Template here.
What are the Main Types of Hedge Fund Businesses?
There are a number of different kinds of hedge fund businesses, some examples include: Global Macro, Event-driven, Relative value, and Directional.
How Do You Get Funding for Your Hedge Fund Business Plan?
Hedge Fund businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Hedge Fund Business?
Starting a hedge fund business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Hedge Fund Business Plan - The first step in starting a business is to create a detailed hedge fund business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your hedge fund business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your hedge fund business is in compliance with local laws.
3. Register Your Hedge Fund Business - Once you have chosen a legal structure, the next step is to register your hedge fund business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your hedge fund business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Hedge Fund Equipment & Supplies - In order to start your hedge fund business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your hedge fund business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful hedge fund business: