We advise fund managers, financial institutions and entrepreneurs in the establishment and ongoing operations of all classes of alternative investment funds. Markets and opportunities move rapidly, and once our clients locate appropriate assets or a market for investment, we work with them to develop a suitable, tax-efficient and marketable product.
A major part of our practice also involves advising major institutional, high-net-worth and sovereign investors on their investments into alternative investment funds and managed account platforms.
We are able to provide skilled support to our clients on a cross-border basis throughout the "life-cycle" of a fund, including:
- Manager establishment: Every successful manager began life as a start-up. Whilst very exciting, establishing a new venture can be daunting. Dealing with all of the issues, from obtaining regulatory authorization to negotiating the terms of arrangements with fellow principals, hiring employees, and negotiating the leasing of premises and equipment, can take their toll on the pace of fundraising and investing. We have considerable experience acting for new managers and helping them overcome these obstacles. We can provide appropriate and cost-effective support as you grow. We can also help enshrine the terms the principals have agreed upon in the manager's constitution and related shareholder agreements, as well as ensuring that such arrangements are tax-efficient.
- Fund formation: We have extensive experience negotiating managed accounts for large or complex mandates, and establishing bespoke structures seeking to achieve various objectives without the constraints of a mainstream fund structure. We have established such structures for numerous purposes including to invest in credit instruments and esoteric investments, to achieve synthetic exposure to hedge funds, to establish derivatives positions, and to manage pension fund risk exposures (for example, by using mortality swaps to hedge against annuity exposure). We are able to advise on all aspects of establishing such products, including negotiating with counterparties and service providers.
- Post-launch: Once a fund is launched, we are able to offer a full range of services in relation to its operation, including further investor closings, dealing with subsequent amendments to the fund (such as the establishment of feeder funds and parallel investment vehicles), portfolio transactions (including derivatives), investor relations, compliance, investigations by regulatory authorities and ongoing disclosure obligations. We also advise managers on all issues relating to their duties to their clients and regulatory compliance. We have extensive experience advising funds on regulatory, securities and compliance matters, including the Financial Services and Markets Act, the FSA Handbook, market abuse and insider trading in the UK, and MiFID and UCITs compliance on a Europe-wide basis. Our private funds team in the United States is also able to advise on a seamless basis in relation to the Investment Company Act, Investment Advisers Act, Securities Exchange Act, Securities Act, Sarbanes-Oxley, ERISA and Dodd-Frank Act, and other regulatory issues in the United States (please click here for more information).
- Financing, prime brokerage and derivatives: In conjunction with our banking and finance team, we are able to advise on and negotiate a range of borrowing facilities for funds, including bridge finance, revolving credit facilities and margin financing. We also advise hedge funds on their prime brokerage arrangements and on derivative transactions.
- Transactions: We regularly advise on corporate and other transactions involving funds and fund managers, including mergers and acquisitions, joint ventures and restructurings. We have the capability to advise on all related tax, regulatory, employment, pensions and intellectual property matters.
- Litigation: We work closely with Reed Smith's Commercial Disputes Group, and together we have extensive experience acting in fund-related litigation. We advise on claims arising in a variety of contexts, including principals' disputes, investor claims, manager removal, employee and bonus disputes, service provider claims, structured investment vehicles (SIVs) and structured products, insolvency, regulatory investigations and fraud. We have extensive experience in disputes involving structured investment vehicles (including in connection with the Lehman insolvency), mis-selling claims, and claims based on inadequate risk management and controls.
- Winding Up: We advise on and coordinate the timely and efficient dissolution of funds and fund managers, whether this is following the fulfillment of its investment objective or as a result of intervening events or market conditions. We also advise funds and fund managers on insolvency issues on a cross-border basis.
- Investing in Funds: As well as establishing funds, we also act for a wide variety of institutional investors ranging from pension schemes to sovereign wealth funds. We act for some of the largest UK pension schemes and major sovereign wealth funds, and have invested several billion dollars on their behalf into hedge funds, private equity funds, real estate funds and credit funds. We do not adopt a "one size fits all" approach to investor representation and are able to devise a range of approaches to due diligence and negotiation that match specific client objectives and budgets. We assist our clients by reviewing fund documentation, negotiating improved terms (whether by way of amendments to the fund's constitutional documents or side letters), and managing the regulatory and tax issues arising in connection with their investments. We also advise on co-investment, seeding arrangements and taking equity stakes in managers.