Fund Formation and Operation
Fund sponsors must confront numerous challenges in the formation and operation of private investment funds. Our team provides help and guidance to both new entrants and established firms on all fund formation and operational issues.
We can advise you on the formation of private investment funds of all sizes, with any structure, objective and strategy. This includes everything from devising fund legal and tax structures and offering terms, to navigating the regulatory schemes applicable to a fund and its investors, drafting offering, governing and subscription documents, negotiating with fund investors, coordinating closings and handling all post-closing matters. We also provide ongoing counsel during the lifespan of an investment fund.
Internal Investment Firm Matters
We provide specialist advice for principals on the establishment of investment firms, as well as the issues confronting existing firms. This encompasses entity structures, operating agreements and governing documents, internal governance and economic arrangements, taxation, carried interest, bonus pool and other incentivization schemes, employment and benefits, succession planning, separation matters and regulatory compliance. In addition, we counsel on the acquisition and sale of minority and majority stakes in investment firms, seeding and revenue sharing arrangements with third party investors, and joint ventures between independent sponsor groups and management teams.
Another important component of our advice is in regulatory compliance matters, which include applicable securities, investment adviser and commodity trading adviser registration and licensing requirements, the updating of regulatory filings, compliance policies and procedures, securities and commodity futures regulatory matters, regulatory examinations, audits, investigations and enforcement proceedings, and anti-money-laundering. We regularly deal with the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), National Futures Association (NFA), the Financial Industry Regulatory Authority (FINRA), the Financial Conduct Authority (FCA) in the UK, Australian Securities & Investments Commission (ASIC) and other regulatory authorities.
Institutional Investor Representation
We have a dedicated team representing institutional investors across asset classes, transactions types and geographies. Our client base includes sovereign wealth funds, pension funds, funds of funds, foundations, universities, endowments, family offices, high-net-worth individuals, banks and insurance companies.
Investments in Private Funds
We advise institutional investors across the full spectrum of fund types. Our lawyers perform extensive legal, tax and commercial due diligence, negotiate the terms of investments, guide clients in the completion of subscription materials and satisfaction of Know Your Customer (KYC) and anti-money-laundering requirements, and provide written summaries of fund terms and sign-off memoranda. Our lawyers also advise on post-investment on all follow-up matters, such as fund interest transfers, “most favored nation” side letter elections, and reviewing amendments to fund structures, among other things. Similarly, we also assist institutional investors in structuring seeding and revenue sharing arrangements with emerging managers.
Related Private Fund Transactional and Regulatory Expertise
We have experience across a wide-range of transactional and regulatory topics, including private fund investment platforms, co-investments and direct investments and fiduciary counsel.
Sovereign Wealth Funds
Sovereign wealth clients can rely on us for both the legal skills and the level of sophistication that is critical to this area. We have advised dozens of governments and sovereign enterprises on issues related to the investment, management and administration of sovereign wealth. For more than three decades, our lawyers have handled complex transactions, provided advice and resolved legal disputes involving state‐owned investment funds in more than 70 countries around the world. We are privileged to have been able to serve among the principal legal advisers for some of the largest sovereign wealth fund investors in the world, including several from GCC countries, as well as from Korea, Southeast Asia and North America.
Customized “Funds of One” and Managed Accounts
You can tap into our extensive experience in structuring fully customized “funds of one” (including hedge funds, private equity funds and funds of funds) and managed accounts.
For sponsor clients, we take the lead in devising structures, drafting governing and operating agreements, subscription documentation and managed account agreements, and negotiating agreements with counterparties and other service providers. In this regard, we have negotiated opposite some of the world’s largest institutional investors.
For institutional investor clients, we review, comment on and negotiate the terms of the private offering memorandum, the governing and operating agreements, subscription documentation, the investment management agreements, side letters and agreements with counter-parties.