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This is too big a financial crisis to be wasted!

Amy Zhang, CPA is the Managing Member of Affinity Fund services LLC, a boutique hedge fund administration and accounting firm based in San Francisco.

Their clients range from emerging fund managers to prominent investment advisers with diverse investment strategies such as long-short equity, derivatives, fixed income and distressed debt. They manage fund accounting records, prepare annual financial statements, provide disbursement letters for California registered investment advisers, and consult with emerging fund managers to expedite their start-up process.

MO:
Can you give more detail to the exact services that you provide and why they are valuable?

Amy:
Sure.  Here are our two core services: one, monthly accounting records, including balance sheet, income statement and partners allocation spreadsheet; two, annual financial statements with footnotes disclosures.

After the Madoff scandal, many investors are requiring hedge fund managers to have a third-party administrator rather than an in-house personnel to handle the above accounting work, we, the ex-auditors, provide these services at a price that preserves fund performance.

MO:
Tell us more about your background and how it led you to Affinity Fund Services, LLC
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MO:
Tell us more about your background and how it led you to Affinity Fund Services, LLC

Amy:
I am a CPA by training – have both bachelor & master degree in accounting and am a licensed CPA in California.  I spent my entire career life in public accounting firms: first with PricewaterhouseCoopers then a regional accounting firm that specializes in hedge funds.

When I was an auditor, I had to train my clients’ administrators on proper hedge fund accounting.  After a while, I thought: “why not have my own firm and stop these hassles from day one?” My clients don’t need to worry about accounting errors, my auditor friends don’t have additional audit workload, and everyone is happy.

MO:
Why is right now a great time for people looking to start a hedge fund?

Amy:
One, this is too big a financial crisis to be wasted.  How often do you see stock price at this low level?  Sure, there’re some companies that were overpriced before, but there’re also solid good companies whose prices have been driven way below their actual value.   If you are good at what you do: investment, it’s a great time to build the track record.

Two, enjoy a more cost-friendly environment. Service providers are more willing to speak with managers with smaller launches now.  It’s a lot more common now to see people starting with $1mm.

Third, low opportunity costs.  With Wall Street cutting labor costs and having bonus reduction/freeze, you will probably have less concern about missing the big buck at year end.

MO:
What is your favorite part of being the Managing Member for Affinity Fund Services, LLC?
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MO:
What is your favorite part of being the Managing Member for Affinity Fund Services, LLC?

Amy:
Too many.  If I have to pick one, I’d say getting together with clients and learning about their concerns and find the solutions.

MO:
How did you manage to grow your business in such a rough economy?

Amy:
I have a very strong focus on people. I am always thinking ahead for my clients and professional friends, and people reciprocate the kindness.

I’m also fortunate that many people gave me the benefit of doubts in my first year, and we work hard to meet and exceed their expectation.

MO:
What is in the near future for Affinity Fund Services LLC?
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MO:
What is in the near future for Affinity Fund Services LLC?

Amy:
This is something to work out with our clients.  We consider them as our business partners and want to make sure we are growing at the right pace.  Right now, we are focusing on emerging fund managers, entrepreneurs just like us.

Over the labor day weekend, we made a series of youtube videos on “how to start a hedge fund”, to help entrepreneurs break away from the labor force and become their own boss.  In many ways, our success depends on each other.

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