Fund Administration

Cannabis Investment Funds

While the investment case for cannabis is strong, it is also fraught with significant legal and regulatory risk. This environment mandates that managers looking to establish Cannabis investment vehicles team with a knowledgeable partner to help them navigate this challenging landscape. Stonegate Global is a leader in the formation and administration of Cannabis related investment funds.

Fund Formation

Establishing and structuring investment products in general is a fairly complex process.  However, various aspects have been streamlined significantly over the past decade and comprehensive solutions allow the investment management team to work with operational and formation specialists who provide various services and who quarterback the entire launch process, versus the investment management team retaining numerous service providers and subsequently having to manage this complex process themselves.

The process includes evaluating and advising on fund structure, formulating the appropriate offering documents, structuring the fund companies and the investment management company, as well as drafting the private placement memorandum (PPM), the limited partnership agreement (LPA) and operating agreements. The offering documents should include a private placement memorandum (PPM), or offering memorandum, which contains the terms and conditions of the investment offering, along with a discussion of risks and other important factors. The PPM is typically provided to prospective investors. Although there is no requirement, legal or otherwise, for an investment manager to retain an attorney to write the fund’s formation and offering documents, it is advisable for legal counsel to review the offering documents to confirm that the fund is compliant with relevant securities laws and not exposed to undue risks.

Fund Administration

The fund administrator is probably the most critical role for digital asset investment funds.  Fund administration of cannabis investment funds is highly complex and requires specialized legal and regulatory expertise.  Given the complexities involved in administering these types of investment fund products, having a comprehensive solutions provider is even more critical.

Hedge fund administration services include AML/KYC, processing investor subscriptions and redemptions, maintaining the shareholder register, managing capital calls, cash and position reconciliation, P&L reporting, risk management reporting, monthly portfolio and partnership accounting, calculating the fund’s NAV, shareholder reporting, FATCA/CRS compliance and reporting, gatekeeper/cash management, financial statements and footnotes, providing K-1 data and other services.  Investment Managers and their Investors can access financial statements, net capital account statements, tax statements and other fund documents through Stonegate Portal, which is our online web reporting platform.

To find out more about our leading edge products, or how to start a hedge fund, please give us a call at