- Sponsor: typically holds founder voting shares, which control management of the fund but are usually not entitled to any distribution or share in the equity.
- Manager, Management Company/Investment Adviser: responsibilities include determining investment strategy, making choices in portfolio holdings, and making operational decisions.
- Board of Directors: responsible for monitoring the fund’s overall operations (for funds with a board).
- Fund Administrator: ensures calculation of the net asset value and performs administrative services such as accounting and bookkeeping.
- Custodian: safekeeping of fund’s assets, clearing and settling all trades, and monitoring corporate actions such as dividend payments.
- Legal Adviser: assists the fund with legal matters.
- Auditors: audit the fund for compliance with accounting practices and verify the annual financial statement, if any.
- Registrar, Transfer Agent: keeps and updates a register of shareholders, which typically are limited partners.
- Distributors/Placement Agents: handles marketing and distribution of fund shares to accredited investors.
- Brokers: unless a hedge fund has direct access to the market, it needs to place its orders with a broker, typically using the services of several executing brokers.
- Prime Brokers: provide execution and operational services, including clearing trades, acting as global custodian, and providing both margin financing and securities lending.
Source: François-Serge Lhabitant, Hedge Funds: Myths and Limits. 2002. Copyright John Wiley & Sons Limited. Reproduced with permission.