UBTI, Unrelated Business Taxable Income, is a concern to tax exempt investors in a hedge fund because the receipt of UBTI requires the tax exempt entity to file a tax return that it would not otherwise have to file and pay taxes on income that would otherwise be exempt, at the corporate rate. UBTI includes most business operations income and does not include interest, dividends and gains from the sale or exchange of capital assets. Hedge Funds trade their own securities and therefore the tax exempt investor's share of such income of the hedge fund is not UBTI and not subject to federal income tax. However, hedge funds may subject tax exempt entities to UBTI under certain Circumstances where the hedge fund is borrowing or purchasing securities on margin. Such transactions may subject the tax exempt to UBTI tax.

Source: ILPA

europarl : Undertakings for Collective Investment in Transferable Securities (UCITS) are a particular class of investment funds that comply with the terms of an EU directive of the same name. The EU rules allow fund managers to market their UCITS EU-wide without needing to register in each of the member states they are marketing in. These funds are typically sold to retail investors. Until the entry into force of an EU law regulating alternative investment funds (AIFs), the requirements imposed on UCITS are much more stringent than those on AIFs.

esma: Undertakings for Collective Investment in Transferable Securities (Directive).

Source: europarl, esma

Uniform Limited Partnership Act.

Source: ILPA

Money that has been committed to an investment but not yet transferred to the General Partner.

Source: ILPA

Unit of Account is an accounting term which identifies the level at which an asset is aggregated or disaggregated for Fair Value recognition purposes. Unit of Account is dictated by individual accounting standards that are subject to interpretation. Because Fair Value accounting standards seek to reflect the economic behaviour and the perspective of Market Participants these Valuation Guidelines generally use a Market Participant view in assessing the level of aggregation or disaggregation. For example, where accounting guidance is open to interpretation, if a Market Participant would purchase an entire interest in a private company (not focusing on individual shares) the Unit of Account would be the overall interest purchased. However, if accounting standards clearly define Unit of Account, such guidance should be followed.

Source: IPEV

IPEV: An Unquoted Investment is any financial instrument other than a Quoted Investment.

ILPA: An underlying holding that is still active.

GIPS: Residual value divided by since-inception paid-in capital.

Source: IPEV, ILPA, GIPS

The point at which 25% of all returns in a group are greater and 75% are lower.

Source: ILPA

United States

Source: esma