Our team includes former SEC, CFTC and FINRA staff members and former in-house counsel or compliance officers who worked for private and public funds.
Eversheds Sutherland provides sponsors of, and investors in, private investment funds with comprehensive, value-added service.
We provide sponsors of hedge funds, private equity funds, timber funds and real estate funds with a full range of services, from the initial creation of an advisory business and formation of its first fund to advising on the most sophisticated tax, securities, the Employee Retirement Income Security Act (ERISA), derivatives and transactional matters for clients managing tens of billions of dollars. Our work on behalf of sponsors informs, and is informed by, our decades of experience representing leading institutional investors in private funds, including sovereigns, pension funds, endowments, funds of funds and insurance companies.
Why Eversheds Sutherland
Comprehensive service. We guide clients in every aspect of the fund and fund sponsor life-cycle. Our clients manage portfolios ranging from less than $10 million to well over $25 billion. We have formed funds using an array of onshore and offshore structures including master-feeders, mini masters, funds that issue debt, as well as equity, levered vehicles, managed account platforms and funds of one.
Responsiveness and Practical Advice. Listening to our clients and understanding their needs enables us to structure the most appropriate funds and then counsel on all aspects of fund operation and management. Adding to our insight is the prior service of a number of our attorneys as general counsel or senior in-house counsel for prominent private fund sponsors. We take a comprehensive approach that brings together our colleagues from across practice areas to help anticipate issues before they arise and to allow clients to take advantage of new opportunities.
The right structure. Our corporate, securities, tax and ERISA teams provide guidance on structuring funds and investment management organizations.
Sophistication. We advise funds that use various portfolio strategies including long-short equity, global macro, quantitative strategies, various forms of arbitrage distressed debt, opportunistic credit, trend-following and counter-trend, and levered and unlevered lending, and different types of assets, including equities, debt, derivatives, real assets (including real estate and timber), intangibles, physical commodities and emerging market assets. We also advise leveraged buy-out (LBO) funds, mid-market private equity funds and venture funds.
Regulatory experience. Our team includes former staff members at the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Financial Industry Regulatory Authority (FINRA). This experience and the connections it brings make our team invaluable business partners to our clients.
Practical know-how. Clients come to us for advice on day-to-day operational issues as well as compliance, examinations, investigations and disciplinary proceedings brought by regulators.
Nuts and Bolts
- Fund formation and structuring
- We assist clients from idea generation through fund implementation. We advise on all types of fund structures and prepare all documentation necessary to achieve a successful fund launch. We counsel on:
- Structuring onshore and offshore funds, including master funds, parallel funds, blocker corporations and “pass-through” entities, as well as funds excluded from the Investment Company Act of 1940 (1940 Act) under sections 3(c)(1), 3(c)(5) and 3(c)(7)
- Structuring funds to account for a wide array of investing strategies including equities, debt, commodities, non-U.S. investments, real estate (including real estate investment trusts (REITs)) and timber
- Document preparation including PPMs and limited partnership agreements, sub-advisory agreements, side letters, subscription agreements, prime brokerage agreements, placement agent agreements and other documents necessary to have a successful fund launch
- Sponsor matters such as preparing investment adviser operating agreements, counseling on tax and compensation matters, designing employment and non-compete agreements, succession planning, and regularly providing counsel on conflicts of interest and other similar matters
- Regulatory requirements pre-launch such as registration as an investment adviser, commodity pool operator or commodity advisor, assessing registration requirements in non-U.S. jurisdictions, and other SEC, FINRA, ERISA, and anti-money laundering matters
- All aspects of state, local, national and international tax
- Ongoing operations and compliance
- Once our clients have a successful fund launch, we serve as trusted advisers in the ongoing operations of their businesses.
- Fund operational issues, including management and trading, incentive fees, valuation, issues arising from subscriptions, redemptions and gates, proxy voting, custody, brokerage and soft dollars, and side pocket issues
- Preparation and development of compliance manuals and codes of ethics, chief compliance officer reporting and forensic testing, mock regulatory examinations, annual reviews and training programs, internal controls and risk management
- Design processes to comply with the Investment Advisers Act of 1940, the 1940 Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Internal Revenue Code, ERISA and the Commodity Exchange Act as amended by the Dodd-Frank Act
- Broker-dealer registration and regulatory obligations under SEC and FINRA rules
- Regulatory filings including Form PF, Form ADV, Form 13D, Form 13F, Form 13G, Form 13H, Form D, CPO-PQR, and CTA-PR
- Anti-money laundering laws and the Bank Secrecy Act
- Business continuity and cybersecurity
- Our experienced derivatives team addresses the complex and novel legal issues that arise as innovative derivative products are created to meet business needs and investment opportunities. We provide assistance with:
- Compliance with the Commodity Exchange Act and CFTC and National Futures Association (NFA) regulations
- Dodd-Frank Act implications, including registration of commodity pool operators and commodity trading advisors
- ISDA and other master agreements
- Prime brokerage agreements
- Cleared swap documentation
- Futures account agreements
- Collateral documentation
- Transactional advice
- We assist clients on numerous types of transactional matters including:
- Mergers and acquisitions, including LBOs
- Seed arrangements
- Joint ventures
- Borrowings and lending agreements
- Asset purchases and sales
- Real estate transactions
- Lease and acquisition negotiations
- Fund raising
- We stay abreast of all current and proposed regulations that affect marketing efforts of private funds and provide guidance on what is “market” when clients negotiate with prospective investors. We have counseled clients on:
- Private and public offerings
- Compliance with Regulation D and Regulation S and the JOBS Act
- Marketing to non-U.S. investors
- Negotiating fund terms with investors, and the preparation of side letters and other investor arrangements
- Our tax group is highly sought after to provide guidance on:
- Tax considerations in the formation of offshore and domestic funds
- Structuring considerations, including the management of passive foreign investment companies (PFIC), unrelated business taxable income (UBTI) and U.S. trade or business effectively connected income (ECI) exposures
- Withholding and information reporting regimes, including FATCA compliance
- Qualification for, and application of, income tax treaties
- Intellectual property matters
- We protect the intellectual property of private fund sponsors, counseling on:
- Trademark registration and enforcement
- Confidentiality agreements
- Third-party service provider arrangements
- We have developed strong relationships with service providers and understand the intricacies of negotiating as counterparties to them. We offer:
- Contract negotiations for services such as administration, prime brokerage, custody, accountants, compliance services and other back-office functions
- Software negotiation and implementation, including portfolio management and accounting systems
- Examinations, litigation and enforcement
- Former SEC, FINRA and CFTC staff members, as well as highly-skilled litigators, provide invaluable counsel on:
- SEC, FINRA, CFTC and other regulatory examinations and defense
- Commercial litigation and defense
Eversheds Sutherland’s private investment fund practitioners have the experience to guide clients through all aspects of changing governmental regulations, challenging business environments and unique legal issues associated with private funds.