The term Hedge Fund Manager is used to describe the manager or adviser of a Hedge Fund that makes the investment decisions for a hedge fund or fund of hedge funds. In most cases the manager is not a person, but rather is a management firm or company. For instance, most domestic hedge funds located in the United States that take in money of United States investors  are set up as limited partnerships with each investor being a limited partner with no control, discretion or voting rights in the limited partnership.

All the control, discretion and voting rights rest with the general partner.  That general partner is the investment manager, also commonly referred to as the Hedge Fund Manager.  That Hedge Fund Manager is usually set up as a corporation or limited liability company and handles all investment decisions regarding what investments to make, how much to invest, and when to sell or liquidate investment positions.

Depending on the size of the fund and how much it has in assets under management, the manager might just oversee traders who do the actual trading of the stocks based on charts, graphs and economic indicators. Some Hedge Fund Management firms might oversee dozens of traders. Depending on the trading strategy used, most traders monitor there stock positions and look for new investment opportunities based on very sophisticated trading models

Some managers also hire traders that have their own proprietary trading system that they developed and use to trade stocks. These traders, if they have a good track record, are highly sought by fund managers and may be paid a portion of the profits in the hedge fund. If these traders fail to perform and show good returns however, they are usually let go by the manager.

On the federal side, Fund Managers are covered regulatory wise, by the Investment Advisers Act of 1940 which was established by the United States Securities and Exchange Commission (“SEC”) managers are able to qualify for an exemption while others must register with the SEC.  Even if the manager is exempt under the federal SEC regulations, the manager may not be exempt under the state securities regulations where the manager’s office is located, and therefore, would have to register with that particular state. 

New York for instance, pretty much mirrors the SEC regulations when it comes to exemptions for Fund Managers. Connecticut, on the other hand does not allow any exemption for Fund Managers at all and so they must go through the state registration process, unless they qualify for registration at the federal level.

For instance, a Fund Manager exempt under the SEC federal regulations is also exempt in the state of New York, because New York pretty much mirrors the SEC Investment Company Act of 1940. That is not the case however, in Connecticut. Connecticut has no exemption from registration. All Fund Managers have to register in Connecticut, unless they have over $30,000,000 in assets and are registered at the federal level with the SEC. Fund Managers either register with the state or the SEC, but are not required to register with both.  

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