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Yes! It’s a common misconception that licensing is required to create and run a fund. While there are complex federal and state level regulations and rules that apply, Repool helps navigate them safely.
Not all states have the appropriate regulatory framework for non-institutional fund managers to create funds, but as part of the Repool process, we ensure that we’ll only bring you on if we clear through all the regulatory and legal requirements.
Please reach out for more information.
Great question – we’d ask the same thing! While we are a startup, we are not a startup that cuts corners. After all, SEC regulations are serious business.
We work with the same legal counsel that multi-billion dollar institutional hedge funds use, and similarly, across all the ongoing fund services we provide, we partner with top-tier institutional services providers.
Rest easy knowing that from start to finish, you have the absolute best industry experts helping you easily run your fund.
To you! We are not affiliated with your fund in any legal sense.
Our platform is what you will use to create your fund, and the software your fund uses to operate fund day-to-day.
Think about it like Airbnb; you own your home – Airbnb just helps your manage it!
Technically, no, but because we have minimum annual fees for our services over time, we recommend funds be at least $500,000.
No – SEC and state-level regulation is very clear that anything that approximates fund-like behavior and tries to get around a regulated fund entity is illegal unless you are a Registered Investment Advisor. Repool is unique because funds can be run without being an RIA, but still come with regulatory requirements.
Be very careful if you see new solutions proposing that you can monetize or behave on a fund without a license. The SEC has shut down and charged similar companies with securities fraud in the past.
Currently, copy trading in the US is only possible with cryptocurrency or non-securities like Forex.
We fully recognize some startups (but notably, none of the major brokerages) allegedly offer securities copy trading services. Please proceed with caution.
Any startup mirror/copy trading platform that allows you to copy trade without being an RIA is violation of securities law, even if the monetization is ’roundabout’ such as via followers. Previous companies, such as Ditto Trades, which were FINRA registered entities, have been shut down in the past for allowing non-RIAs to be ‘portfolio creators’ or ‘lead traders’.
Generally no, but if you have sophisticated strategies (vol, fixed income, etc), please contact Repool to confirm.
If you trade solely stocks and/or options, there are no restrictions to be aware of.
For most funds, you are capped at 100 lifetime fund investors.
Investors must be US-based only at the current time.
Additionally, depending on the state in which you are located, there may be restrictions on the types of investors allowed in the fund.
All states allow for Qualified Clients and any Repool eligible state allows for Accredited Investors. However, only some states accept Non-Accredited Investors. Please contact us or fill out the waitlist to learn more.
Accredited – Income of $200k+ for the last 2 years as an individual, or income of $300k+ for the last 3 years as a household.
Non-Accredited – Anything below the above.
Qualified Clients – Above $2.1M net worth.
First – please get in touch to understand the specific eligibility rules for your state.
Second, Repool will provide tools to “KYC” (know-your-customer) potential investors when necessary, so you don’t need to worry about any mistakes.
If you create a Repool fund, we’ll use Interactive Brokers as your brokerage.
We’re working on adding support for more brokerages in the future!
There’s a reason only institutional players create funds traditionally – they’re extremely complex to create and manage. You’d need to not only become well versed in regulatory matters, but assemble your own team for accounting, auditing, legal, compliance, training, and more. Oof! You’ll also need a lot of money initially and on and ongoing basis, which is why funds traditionally start at a certain size – to cover creation costs!
Currently, you’ll need to have some sort of pre-existing relationship with the fund manager you’re interested in and be invited and accepted by that fund manager.
While there is technically no minimum investment size, and a fund investor can accept any size investment, because of practical fund size requirements, we expect that you should have at least $20k of investable capital to be accepted into a fund.
This answer may vary depending on the specific fund, but a typical fund fee structure is usually around what’s called a “2 and 20”, or 2% management fees, and 20% performance fees for gains.
There are no up front fees.
After joining a fund, you’ll simply pay the fees associated with the fee structure that the fund manager decides upon and which will be disclosed to you in advance, typically somewhere near a 2 and 20 as described above.
Much like trading applications, we’ll provide you with the paperwork you need to easily file taxes each year!
Hedge funds typically have what are known as lock up periods. Unlike some forms of investing, you can’t just take out money whenever you want.
In Repool, most funds have a quarterly liquidity structure for changing your allocation/removing funds.
The reason for this is to allow consistency to the hedge fund and manager. One of the reasons that Michael Burry famously made money during the housing collapse is because of lock up – his investors were worried, but he had a strategy that required time! Good trading strategy is similar (and we won’t ask you to keep your money in for years like Burry!).