Glossary
Every fund term,explained simply.
NAV, SPC, high-water mark, cap intro, ODD, tokenised register. Definitions for managers launching a fund and allocators evaluating one, written by people who run the operations.
2 and 20
The traditional hedge fund fee structure: 2% management fee and 20% performance fee. Many funds now charge less.
Fees & Liquidity
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Accredited investor
The US category for private-securities investors: US$200k income or US$1m net worth excluding the home.
Investors & Due Diligence
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Allocator
An investor who places capital with external managers: family offices, funds of funds, endowments, pensions.
Investors & Due Diligence
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Anti-money laundering (AML)
The laws and controls, from KYC to reporting, that stop a fund being used to launder criminal proceeds.
Compliance & Custody
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Assets under management (AUM)
The total value of assets a fund or manager runs for investors. The base for management fees.
Investors & Due Diligence
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Atomic settlement
Cash and fund units settle in one indivisible step, so units are recorded the moment money arrives.
Tokenisation
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Beneficial owner (UBO)
The natural person who ultimately owns or controls an entity investor, typically above a 25% or 10% threshold.
Compliance & Custody
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Business continuity plan (BCP)
How a fund and manager keep operating if a key person, office, system or provider is lost.
Investors & Due Diligence
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BVI Professional Fund
The BVI's open-ended fund category for professional investors, with a US$100,000 minimum per investor.
Fund Structure
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Capital introduction (cap intro)
Introducing fund managers to prospective investors, traditionally by prime brokers, now also by platforms.
Investors & Due Diligence
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Cayman Islands fund
A CIMA-registered fund in the largest offshore hedge fund domicile, widely accepted by institutional allocators.
Fund Structure
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Contract note
The administrator's confirmation of each subscription or redemption: date, NAV, shares, amounts and settlement.
Administration & NAV
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Crypto hedge fund
A private fund trading digital assets through a regulated vehicle with independent administration and custody.
Compliance & Custody
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Crystallisation
The point at which an accrued performance fee is paid and the high-water mark resets, usually annually.
Fees & Liquidity
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Daily NAV
NAV struck every business day rather than monthly, giving a current price, daily dealing and a daily return series.
Administration & NAV
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Dealing day
A day on which a fund accepts subscriptions and redemptions, executed at that day's NAV.
Administration & NAV
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Due diligence questionnaire (DDQ)
The standard question set (often AIMA-based) an allocator sends a manager before investing.
Investors & Due Diligence
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Emerging manager
A manager early in running a fund business, usually with a short track record and sub-scale assets.
Investors & Due Diligence
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Exchange sub-account
A fund-owned trading account under a master exchange account, with trading keys delegated and withdrawals restricted.
Compliance & Custody
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Family office
A private organisation managing one or several families' wealth. Often the first institutional-grade investor.
Investors & Due Diligence
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First-loss capital
Seeding where the manager's or provider's capital absorbs initial losses in exchange for a larger profit share.
Investors & Due Diligence
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Founders share class
A reduced-fee share class for investors who commit before a fund reaches a set size or date.
Fees & Liquidity
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Fund administration
Outsourced back office: NAV, registry, dealing, fees, reporting and audit support, independent of the manager.
Administration & NAV
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Fund administrator
The independent provider that calculates NAV, keeps the register, processes dealing and produces investor statements.
Administration & NAV
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Fund audit
The annual independent examination of a fund's financial statements, NAV and register by an external auditor.
Compliance & Custody
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Fund domicile
The jurisdiction whose law governs a fund and whose regulator supervises it. Sets cost, speed and eligibility.
Fund Structure
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Fund of funds
A fund that invests in other funds. Emerging-manager specialists back new managers for better terms.
Investors & Due Diligence
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Hedge fund
A privately offered, open-ended fund with broad strategy freedom and a performance fee, for professional investors only.
Compliance & Custody
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Hedge fund fees
Manager fees plus fund-level expenses such as administration, custody and audit. Together they set the net return.
Fees & Liquidity
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High-water mark
The highest NAV at which a performance fee was paid. Fees are earned only on gains above it, never on recovered losses.
Fees & Liquidity
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Hurdle rate
The minimum return a fund must beat before a performance fee can be charged, fixed or benchmark-linked.
Fees & Liquidity
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Investor App
POD's planned iOS and Android app for viewing holdings and dealing in POD funds, coming late 2026.
Tokenisation
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Key person clause
Names the individuals essential to a fund and gives investors an exit if one leaves.
Fund Structure
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Know your business (KYB)
Verifying a company: registration, ownership, directors and controllers. Applied to entity investors and managers.
Compliance & Custody
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Know your customer (KYC)
Verifying an investor's identity, and beneficial owners for entities, before accepting them into a fund.
Compliance & Custody
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Liquidity terms
Dealing frequency, notice, lock-up, gates and suspension powers: the rules for getting money out of a fund.
Fees & Liquidity
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Lock-up
A period after subscription during which an investor cannot redeem, hard or soft (early exit for a fee).
Fees & Liquidity
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Management fee
The fixed annual fee paid to the manager as a percentage of net assets, charged whether or not the fund makes money.
Fees & Liquidity
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Manager OS
POD's operating platform for running a fund: structure, accounts, investors, dealing, NAV and reporting in one place.
Tokenisation
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Master-feeder structure
Feeder funds for different investor groups pool capital into one master fund that holds the investments.
Fund Structure
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Maximum drawdown
The largest peak-to-trough fall in NAV over a period: the worst loss from buying at the top.
Investors & Due Diligence
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Most-favoured-nation (MFN) clause
Entitles an investor to any better terms the fund later grants another investor of similar size.
Fund Structure
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NAV calculation
Valuing assets, deducting liabilities and dividing by shares outstanding, done by the administrator at each valuation.
Administration & NAV
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Net asset value (NAV)
A fund's assets minus liabilities at a valuation point. Divided by shares in issue, it sets the dealing price.
Administration & NAV
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Notice period
The advance warning an investor must give before redeeming, typically 30 to 90 days for a hedge fund.
Fees & Liquidity
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Offering memorandum (OM / PPM)
The legal disclosure document (OM or PPM) setting out a fund's strategy, terms, fees, risks and eligibility.
Fund Structure
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On-chain vault
A smart contract pooling depositors' crypto for a designated manager to trade on a decentralised venue.
Investors & Due Diligence
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Open-ended fund
A fund that issues and redeems shares on demand at NAV, so capital grows and shrinks with investor flows.
Fund Structure
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Operational due diligence (ODD)
An allocator's review of structure, providers, custody, valuation and controls rather than strategy.
Investors & Due Diligence
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Performance fee
The manager's share of profits, typically 20%, charged above a high-water mark and crystallised at set intervals.
Fees & Liquidity
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POD Discover
POD's cap-intro platform where verified professional investors source, diligence and subscribe to emerging managers.
Tokenisation
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Politically exposed person (PEP)
Someone holding a prominent public position, or their close associates, subject to enhanced due diligence.
Compliance & Custody
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Prime broker
A bank or specialist providing custody, financing, settlement and cap intro to hedge funds above a size threshold.
Compliance & Custody
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Professional investor
An investor allowed into private funds because of experience or wealth. Definitions vary by jurisdiction.
Investors & Due Diligence
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Qualified custodian
A regulated institution holding fund assets in the fund's name, separate from the manager's.
Compliance & Custody
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Qualified purchaser
A US investor with US$5m+ in investments, the standard for 3(c)(7) funds with unlimited US investors.
Investors & Due Diligence
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Redemption
Selling shares back to the fund at NAV, subject to notice period, lock-up and any gate in the documents.
Administration & NAV
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Redemption gate
A cap, usually 10–25% of NAV, on how much of a fund can be redeemed on one dealing day.
Fees & Liquidity
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Sanctions screening
Checking investors and owners against OFAC, UN, EU and UK lists at onboarding and continuously thereafter.
Compliance & Custody
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Seed capital / seeder
The first substantial investment in a new fund, given in exchange for preferential terms.
Investors & Due Diligence
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Segregated portfolio company (SPC)
One Cayman or BVI company divided by statute into ring-fenced portfolios, each usable as a separate fund.
Fund Structure
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Segregated portfolio (sub-fund)
A ring-fenced compartment of an SPC with its own assets, investors, NAV and track record. Also called a sub-fund.
Fund Structure
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Separately managed account (SMA)
A single investor's account traded by a manager under a mandate. The investor keeps custody and control.
Investors & Due Diligence
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Series accounting / equalisation
Methods for charging performance fees fairly to investors who entered at different NAVs.
Fees & Liquidity
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Share class
A category of shares with its own fee, currency, minimum or liquidity terms, investing in the same portfolio.
Fees & Liquidity
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Sharpe ratio
Excess return per unit of volatility. Above 1 is acceptable, above 2 strong, above 3 worth scrutinising.
Investors & Due Diligence
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Side letter
A private agreement giving one investor terms that differ from the offering memorandum, such as fee or liquidity rights.
Fund Structure
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Stablecoin settlement
Funding a subscription or paying a redemption in a USD stablecoin instead of a bank wire, on the same terms.
Tokenisation
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Startup Manager / Emerging Manager (POD tiers)
Startup Manager (from US$1m, shared SPC) and Emerging Manager (from US$25m, own SPC): POD's two launch tiers.
Tokenisation
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Subscription
An investor's purchase of fund shares: sign, verify, fund, and receive shares at the next dealing-day NAV.
Administration & NAV
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Subscription agreement
The contract an investor signs to buy shares, with eligibility, source-of-funds and risk representations.
Fund Structure
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Tokenised fund
A fund whose share register is kept as tokens on a blockchain. Covers private registers and tradable tokens alike.
Tokenisation
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Tokenised share register
The ownership record kept as tokens on a ledger the administrator runs on, removing register reconciliation.
Tokenisation
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Track record
A manager's documented return history. Administered NAV series carry weight; self-reported returns do not.
Investors & Due Diligence
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Trading authority vs withdrawal authority
The manager can trade the fund's assets but cannot move them out. The core investor protection.
Compliance & Custody
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Transfer agent / share register
Keeps the share register: who owns how many shares, and every issue, redemption and transfer. Usually the administrator.
Administration & NAV
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Umbrella fund
A single fund entity holding several sub-funds under one board, one set of documents and shared providers.
Fund Structure
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Valuation point
The fixed time at which a fund's assets are priced to strike NAV. Every order for that dealing day is priced at it.
Administration & NAV
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Occasional updates on fund infrastructure and new POD releases.
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POD is regulated as a fund administrator by the Central Bank of Ireland and as a fund manager in the BVI. Nothing on this site constitutes an offer to sell, or a solicitation of an offer to buy, any security or interest in any fund. Investment involves risk, including the possible loss of capital. Past performance is not a reliable indicator of future results.