Practice Areas
Structuring and Organizing Funds - Regulatory and Structuring
Structuring and Organizing Funds
The Firm assists domestic and foreign funds in selecting the appropriate structure taking into account tax issues and marketing concerns.
We have organized domestic funds as limited partnerships, limited liability companies, business and other types of trusts, and Subchapter S corporations. We have assisted both domestic and offshore funds in creating a number of types of sophisticated structures, including fund-of-funds, master-feeder fund, series fund, and mirror and parallel fund structures.
We prepare organizational documents such as limited partnership agreements, limited liability company agreements, investor questionnaires, articles of association, private placement memoranda, subscription agreements, investment advisory agreements, prime brokerage, margin, custody and administration agreements, regulatory filings, client referral agreements, advertising materials and other documents.
In addition, we coordinate the advice of law and accounting firms from other countries on such matters as offshore fund regulation, foreign registration requirements, solicitation activities, taxation, foreign investor share ownership requirements, and restrictions on the repatriation of investment proceeds and tax reclamation procedures.
Furthermore, we represent sponsors of and investors in venture capital and private equity funds and private and public venture fund-of-funds (that is, funds that invest in venture funds). We assist clients in structuring these funds; drafting and negotiating appropriate organizational and offering documents, and structuring and completing investments. As a result of our significant and wide-ranging work with venture funds, we are familiar with the various structures most commonly used by venture funds when structuring incentive and other fees, distribution provisions, valuation policies, and similar structuring issues.
In summary, the firm regularly represents both sponsors and investors in connection with the establishment of private equity investment vehicles, both domestic and off-shore. The Firm counsels numerous hedge fund managers – from "start up" firms to nationally- and internationally-recognized investment management firms – on virtually all matters relating to the structure, organization and operation of hedge funds. We have worked on countless funds – both onshore and offshore – that engage in a wide variety of strategies and invest or trade in a broad range of securities, futures and other financial instruments.
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Regulatory and Structuring
We advise domestic and offshore funds on, and assist in preparing policies and procedures relating to, a variety of U.S. regulatory issues, including:
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Federal and state private placement issues, including issues under Section 4(2) of the 1933 Act, and Regulation D, Regulation S, Rule 144 and Rule 144A under the 1933 Act;
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Sections 3(c)(1) and 3(c)(7) exemptions from the ICA; |
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Regulatory issues under the ICA, including the limitations on investments in registered investment companies imposed by Section 12(d)(1) of the ICA; |
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Exemptions from and regulation under the IAA, and comparable state laws, including the regulation of performance fees, principal and cross-trades, solicitation arrangements, custody rules and advertising restrictions;
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Restrictions on the distribution and financing of interests in private funds, including issues involving sales charges and commissions, distribution and sub-distribution arrangements, and the financing of "B share" arrangements; |
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Requirements (including fiduciary responsibility and prohibited transaction requirement) applicable to employee benefit plans investing in private funds under the Employee Retirement Income Security Act of 1974 ("ERISA"); |
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The Commodity Exchange Act exemptions, and registration and regulatory requirements, applicable to funds that use futures and options on futures;
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supervisory issues under the federal and state securities laws; |
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Reporting requirements and trading restrictions under Sections 13 and 16 of the Exchange Act; and |
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Regulatory and business issues relating to swap agreements and other derivative instruments.
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In summary on Regulatory issues,
the Firm's
representation includes counseling on compliance with the fast-changing and increasingly complex body of federal and state securities laws acting as General counsel on an ongoing basis to existing funds and partnerships and their boards of directors, trustees and general partners. In addition, the firm serves as "independent legal counsel" to independent investment company directors and advise them on governance and other regulatory issues as described above. |
