Hedge Fund Onboarding

Hedge Fund Account Structure

When a client begins the Hedge Fund process, they are first directed to the Hedge Fund Advisor (HFA) or Fund Manager (FM) account. Once the HFA/FM is created, only then can they create the actual Hedge Fund (underneath the HFA/FM account). This process ensures that all parties involved are verified. It is important to understand the difference between the HFA/FM and the Hedge Fund itself. For example, if a large cash deposit was sent to the HFA/HM account, which is a separate entity from the Hedge Fund itself, it cannot be used for trading.

The investment manager can add separately managed client accounts. Each fund account can be owned by a separate legal entity and is credit-managed separately. Trades can be executed for multiple funds in an Allocation Account and trades can be assigned before the end of the day to specific cleared fund accounts.

The investment manager can create multiple tier accounts by adding Advisor, Proprietary Trading Group STL and Multiple Hedge Fund master accounts to their account structure. Each Advisor, Proprietary Trading Group STL and Multiple Hedge Fund master account holder can add client, sub and hedge fund accounts as required.

• Use the Account Queries tool to search for accounts or information on accounts, using a variety of criteria such as account type, status, margin type, beneficiary information, etc.
• View all client activities, including the complete order history from initiation to execution and its routing sequence, with Enhanced Client Activity Monitor (eCAM).
• The Shortable Instruments (SLB) Search tool is a fully electronic, self-service utility that lets clients search for availability of shortable securities from within Portal.

Client Account Funding

The Transfer & Pay menu in Hedge Fund Portal provides resources to let you transfer funds, transfer positions, check transaction status and history, submit withdrawals for both your Hedge Fund Advisor (HFA) or Fund Manager (FM) account and for your Hedge Fund or SMA accounts. The master Fund Manager account cannot hold any positions itself, and instead it is used to trade on behalf of the sub-accounts underneath it. In order to trade the deposited funds, the sub-Hedge fund itself should be funded directly.

Our website provides an overview of funding methods available to clients.

Watch How to Fund Client Accounts Read Notes

User Guide

IBKR’s Soft Dollar Commission Program gives Hedge Funds and Professional Advisors the flexibility to offset the costs of purchasing approved research products and services using soft dollars.

As defined under the Securities Exchange Act of 1934 section 28(e), a portion of commission dollars can be set aside to pay research-related costs incurred by advisors and fund managers. Eligible IBKR Clients can specify amounts that can be added to IBKR commissions and set aside as a pool of available money (Soft Dollars), which can be used to pay for market data and research.

IBKR Clients can then pay allowed expenses for market data and research subscriptions to external vendors. Allowed categories of expenses include fundamental, technical and/or quantitative analysis; portfolio management, valuation and asset allocation services; and economic forecasting.