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HedgeCo has been helping emerging hedge fund managers to successfully launch their new hedge funds for the last nine years.  During that time, we have dealt with a plethora of different strategies and structures, giving us the expertise to consult on all aspects of the hedge fund, private equity fund, and commodity related fund industry. Our goal is to provide our clients with a service that is cost and time efficient and highly ethical.  Our experience comes from years of working with hedge funds not only during the launch phase, but also throughout the course of their existence.  Unlike other so-called consultants, the HedgeCo Consulting Group is made up of individuals that have a vast amount of experience within the industry.  This includes hedge fund administrators, licensed third party marketers, hedge fund managers, accountants, hedge fund website and marketing material and construction experts, and Prime Brokerage experts.  We also work with over 6,000 hedge funds on our database and community at HedgeCo.Net.  This site has almost 30,000 members, many of which are qualified hedge fund investors. Our staff also appears on networks like CNBC and is published in financial publications all over the world, discussing hedge fund establishment and the industry in general.

We take pride in understanding our clients’ specific needs, and offering tailored advice that will not only save them money, but valuable time.  Give us a call today to discuss how HedgeCo can help put together a full service offering to get your firm launched in as little as 30 days.

Evan Rapoport

Evan Rapoport is the CEO of HedgeCo Networks, a hedge fund research and services firm. At HedgeCo, Mr. Rapoport oversees a hedge fund database of over 7,000 hedge funds, as well as a hedge fund user community of over 30,000 members.  He has helped to consult on hundreds of hedge fund launches and has led a team to create over five hundred hedge fund websites and marketing material pieces. Mr. Rapoport is also currently the portfolio manager for HedgeCo Investment Management.  He has been featured on CNBC and has appeared in various publications such as Barron's, Newsweek Magazine, Forbes.com, Florida Trend, Business Journal, Registered Rep. Magazine and others.

Prior to helping found HedgeCo Networks, Mr. Rapoport was a Senior Vice President at Broadband Capital Management, a NASD member brokerage firm in New York City.  At Broadband, Mr. Rapoport managed assets for institutions as well as high net worth clients and also participated in many private placements and PIPE transactions.  Before Broadband, Mr. Rapoport was the youngest Senior Vice President in history at NYSE member Oscar Gruss' Private Client Group.  He started his career in a Chairman's Council member's office at Paine Webber in NYC.  Mr. Rapoport currently holds Series 3, 7, 24, 63, 55 and 79 securities licenses. He also holds a B.A. from the University of Florida.

In the News

Evan Rapoport on CNBC Power & Money
Hedge Funds: Are They Over?

July, 2008

August sell-off hits big hedge fund names hard

By Svea Herbst-Bayliss and Lauren Tara LaCapra:

BOSTON/NEW YORK, Aug 9 (Reuters) - August is not even two weeks old and for top hedge fund traders like Steven Cohen, John Paulson and Bill Ackman it could be a month to forget.

Even Cohen, one of the industry's titans, hasn't escaped the global sell-off -- his $14 billion SAC Capital is down 4 percent this month.

Still after SAC's poor start to the year, the fund is still in the black with a roughly 6 percent gain this year.

That's not the case for John Paulson, whose two flagship funds had suffered steep losses even before the month began. The Paulson's Advantage funds lost more than 10 percent in the last week, bringing total losses in the two portfolios, which oversee about $17 billion of investor money, to more than 25 percent.

The brutal global stock sell-off is quickly turning hedge funds that had been up for the year into losers. Meanwhile, funds that entered August already down for the year are piling up even more red ink.

But just as quickly as the Dow Jones industrials plummeted 6.7 percent on Monday, the index climbed back 4 percent on Tuesday, creating ever more uncertain trading conditions for even the savviest stock pickers.

Industry observers say the way things are headed, many funds may post double digit losses for August.

But so far, there appear to be few large hedge fund blowups because many managers were already reducing their stock holdings going into the summer given concerns about Europe's debt crisis, the sluggish U.S. economy and the political impasse over the U.S. debt ceiling.

The carnage, for the moment, appears confined to small and lesser known funds that can't weather a big loss.

"There have been a number of blowups in the past week, particularly small hedge funds in the volatility options arbitrage space," said Evan Rapoport, chief executive of HedgeCo Networks, which helps clients invest with funds and runs a hedge fund.

The full article is available here: Reuters

Report: Paulson's Hedge Funds Lost 10% In Past Week

By Murray Coleman:

If you think the past few weeks have been rough on your portfolio, take a look at John Paulson's flagship hedge funds.

His firm's two Advantage Funds have lost more than 10% in the past week, according to Reuters. Those portfolios, which have a combined $17 billion in assets, have lost an estimated 25% so far this year.

"There have been a number of blowups in the past week, particularly small hedge funds in the volatility options arbitrage space," Evan Rapoport, CEO of HedgeCo Networks, said in the report.

Other big hedgies are also believed to be feeling their lumps lately. Bill Ackman's Pershing Square Capital Management, which was down more than 4% at the end of July, has seen some of its biggest bets get hit hard in the downturn. Those include JC Penney (JCP) and Citigroup (C).

The full article is available here: Barron's

Fund Firm Sees Opportunity in Madoff's Wake

By Tom Sullivan:

EVER SINCE BERNARD MADOFF'S PONZI SCHEME was uncovered in late 2008, funds-of-hedge-funds -- some of which invested with Madoff even though he shared little information with them -- have been getting squeezed. Massive redemptions and gating -- restrictions limiting withdrawals from hedge funds -- left a lot of the funds, and their investors, without an escape hatch as stocks and bonds plummeted during the credit crisis.

Even so, Scott Prince of SkyBridge Capital sees "a secular trend" of individuals and large pension plans, among others, gradually returning to hedge funds. It can't come too quickly for the funds-of-funds, whose assets have fallen from a high of $826 billion in the second quarter of 2008 to $570 billion more recently, according to industry tracker Hedge Fund Research. Total hedge-fund assets, meanwhile, have begun to creep back up to about $1.67 trillion.

"We have seen a number of mergers and acquisitions in the fund-of-fund industry," says Evan Rapoport, managing partner at hedge-fund database HedgeCo.net, in an e-mail. "However, I would say that we have barely scratched the surface and expect to see a large amount of consolidation. Would-be acquirers wanted to wait and see which funds of funds would survive." The number of hedge-fund-of-funds has fallen to 2,117, compared with 2,439 fund of funds at the end of 2008.

The full article is available here: Barron's

Demise of Hedge Funds Has Been Exaggerated

By Stan Luxenberg:

NEW YORK (TheStreet) -- Investors are returning to hedge funds. During the first four months of the year, hedge funds recorded $24 billion of inflows, according to HedgeFund.net.

The inflows represent a big turnaround from the turmoil of 2008. During the downturn, many funds were forced to liquidate, and some analysts predicted that the hedge fund industry was bound to shrink permanently. Hedge fund assets dropped from a peak of nearly $3 trillion in the second quarter of 2008 to $2.3 trillion this year.

The industry continues to face serious hurdles. With memories of the stock-market meltdown still fresh, many individual investors remain wary of hedge funds. In addition, the new Dodd-Frank financial legislation aims to rein in hedge funds, tightening regulations and restricting investments by banks.

Still, the outlook for the industry remains positive. Many pensions and institutions have been increasing their allocations to hedge funds.

The performance of hedge funds in recent years is helping to attract investors. "Hedge funds have outperformed the S&P 500 and done it with a lot less volatility," says Evan Rapoport, principal of Hedgeco.net, a data provider.

The full Thestreet article is available here: TheStreet

Opalesque Exclusive
Opalesque Exclusive: Carbon360 releases Capital Introduction Report

From the Opalesque team:

The general consensus for fundraising is that 2010 holds much in the way of promise for hedge funds. Strong performance in 2009 slowed the enormous tide of redemptions, and net inflows finally took hold at year-end. Seed announcements dot the news headlines and new launches have picked up pace; the growing momentum is palpable.

New York-based research firm Carbon 360° recently sought to determine how those assets would return to hedge funds. The firm surveyed third party marketing firms and capital introduction specialists to gain a clearer picture of investor trends.

According to the survey, institutional investors now dominate the industry's investor base, followed by family offices/pension funds. While these investors are beginning to allocate into hedge funds, there is still a certain amount of apprehension in moving sidelined cash back into the financial markets. "While a large number of institutional and private investors wait on the sidelines, third party marketers focus their efforts on sourcing capital from areas outside of the United States," writes the report's author, Carbon 360 Senior Analyst Daniel Golyanov.

Fund of hedge funds, which once were the gateway to the hedge fund industry for many institutional investors have seen their foothold greatly diminished as many institutions have instead hired in-house hedge fund specialists. This drop off in assets is reflected as surveyed marketers and capital introduction specialists gave them third place in terms of investor size.

The future of fund of hedge funds is still very much in the air. Those that did not gate funds and that performed well over the past two years will likely benefit from much less competition. But the re-growth of the FoHF space will likely only occur if the "liquidity mismatch" problems that are built into the typical FoHF business model and that caused severe distress during the height of the liquidity crisis are addressed.

Considering this shift in the investor landscape, it is no surprise that transparency and risk management are almost equally important as performance for hedge fund investors. Large institutions have spent much of the past year demanding better reporting, and pressuring funds to make use of third party providers such as risk management platforms, valuations specialists and third party administrators. "As capital begins to return to the industry the biggest winners will be managers with proven track records, large assets under management, and an infrastructure that allows for greater transparency," concludes Golyanov.

Third party marketers themselves have also reportedly picked up the pace of the due diligence they do on their own hedge fund partners, mainly in anticipation of the even more stringent due diligence performed by potential institutional investors.

While expectations for the asset-raising climate as a whole are optimistic, with the bulk of allocations expected to come from institutional investors, a large portion of hedge fund managers will not even be able to compete for these funds. New managers and those with performance records of less than 5 years do not stand much of a chance in securing institutional assets, which in addition to performance track records often require the type of infrastructure that only multi-billion dollar funds have in place.

This is likely why the majority of hedge fund clients that third party marketers are in business with are new and young hedge fund firms. The smaller investment base looking at these funds (family offices and high net worth individuals) means competition for assets in this crowd will be fierce. With the majority of third party marketers paid only upon securing allocations (most reported to take fees of 20% on all management and performance fees of incoming allocations), fund managers are more open to outsourcing their marketing and investor relations efforts, and focusing on the performance of their funds.

"2010 should be a prosperous year for alternative investments." Evan Rapoport, CEO of HedgeCo Securities LLC is quoted as saying in the report. "The managers and investors who survived 2008 and 2009 are the cream of the crop, providing third party marketers and capital introduction firms with a vast array of opportunity. As hedge funds go, so goes the capital introduction industry,"

The full Carbon 360° report is available here: Carbon 360.com