Setting up a simple investment vehicle as a side business like, investment, regulatory, therefore

cyber21

Hey Guys,

I'm starting to think about starting some kind of investment side business, and therefore for modesty reasons won't call it a fund or even a firm, but rather a "vehicle", since I wouldn't have people working for me nor an office.

To make it short, I am wondering if such a thing is possible and if yes, how the hell can a thing like that be setup.

So is it even possible in most legislations to effectively invest other people's money as a side business, without the whole regulatory, prospectus and etc. hassle ? I am talking about very small capital and nothing publicly traded or that has directly to do with financial markets.

So maybe some kind of limited partnership ? Has anyone any kind of experience with this type of stuff ?

krause2

What will you be investing in?

What country/state/province are you in?



Edited 1 time(s). Last edit at Monday, March 28, 2011 at 04:01PM by Hayek.

sabaruch

^^
In alternative energy projects in Europe.
I would be investing directly in the project SPV, either in shares or in shareholder loans (or some other kinds of subordinated debt) or both.

tikfed

Not sure an RIA is the right sort of arrangement for what the OP has in mind.

Viceroy, I'm not an expert but I do know something about this sort of thing (including having set up an RIA) and might be able to be of some help; feel free to shoot me an e-mail if you want.

captainwindjammer@gmail.com

RMontgomery

Captain Windjammer Wrote:
-------------------------------------------------------
> Not sure an RIA is the right sort of arrangement
> for what the OP has in mind.
>
> Viceroy, I'm not an expert but I do know something
> about this sort of thing (including having set up
> an RIA) and might be able to be of some help; feel
> free to shoot me an e-mail if you want.


Hey Captain', sorry for late answer and txs for input.

Ok, so my thing would be based in Germany. I am currently looking into a structure called GmbH & Co. KG.

It's similar to an LP, but the general partner is itself some kind of LLC, meaning that the unlimited liability ends in the LLC on top which I would own 100%. (eventually more layers of LLCs are added to segregate liability even more, but I am faaaaaaar from that point).

I think european law is much more complex with regards to making a fund than what you described, but I am going to see if the "fund" legal status can be avoided and how.

Afterall, let's pretend I asked a couple of friends for money, make an LP and have them as limited partners in the statutes, what is so complicated there ?

Anyways it's not so simple, this legal structure thing is complicated for a noob like me ;)

HuskyGrad2010

Oh and I am also thinking about the possibility of registering my structure abroad, meaning in much simpler legislations.

But then again, for a mini vehicle like what I have in mind, it may not make sense at all.....

Anyways.......

dmrktrading

Try switzerland...

AnalystAlan

^^
Or Luxemburg.

The only problem is, for the size of what I want to do, it might be a bit overkill.

+ I don't know who the limited partners (investors) will/would be, but I think that they will be mostly based in Germany. Germans tend to prefer companies registered in Germany.

Anyways, I made a little bit more research, and it seems the closed-end fund structure described above has minimal legal constraints.

Your prospectus just needs to be approved by the BaFin (local regulatory authority) which apparently just runs a checklist to see if the required documentation is there.

skycfa

Best of luck, and let us know how it goes, I hope to be doing something similar down the road.



Edited 1 time(s). Last edit at Sunday, April 17, 2011 at 01:14PM by Palantir.

lucasg85

Made some further research and it seems pretty doable so far in the above structure.

In fact, it appears that such companies aren't even subject to a "fund" status and that general business / contract law applies, i.e. you are just setting up a normal LP with limited partners who are bringing in equity.

It all seems too simple to be true.

BTW, I read that it's the oldest most simple type of investment company structure, and applies typically to real estate investments as well as VC and PE...