The hedge fund manager Grange Johnson of LaGrange Capital Partners had a banner year in 2010. His two portfolios returned nearly 70 percent in a period when the average hedge fund gained about 10 percent.
But those gains will bring new challenges this year. With his total assets now above $150 million, Mr. Johnson will have to register with the Securities and Exchange Commission under a new rule created to increase industry oversight.
While the cost of compliance will barely make a dent at multibillion-dollar firms like SAC Capital Advisors or Eton Park Capital Management, small players like LaGrange could face a significant financial burden. Even money managers winding down their operations will have to comply if their assets are above the $150 million threshold.
FULL ARTICLE: http://dealbook.nytimes.com/2011/01/20/for-small-hedge-funds-succes...