K&L Gates’ Hedge Fund, Venture Fund, and Private Fund practice represents a full range of U.S. domestic and non-U.S. funds in all aspects of their organization, funding, operations, and extraordinary transactions. Approximately 20 of our partners and of counsel, and a substantial number of associates, devote a significant portion of their time to hedge fund, venture fund, and other private fund matters. Our clients include general partners, managing members and managers of hedge funds, venture funds, private equity funds (including leveraged buyout funds and distressed securities or “vulture” funds), offshore mutual funds, U.S. domestic and non-U.S. equity and debt funds, arbitrage funds, real estate funds, “principal-protected” funds, and various other private funds, as well as the funds themselves and significant fund investors. We work with fund sponsors, advisers, distributors, key investors, and similar participants, as well as custodians, administrators, prime brokers, and other private fund service providers.
Our work involves virtually all aspects of the fund business. We advise on organization, structuring, fund-raising, compensation, distribution, trading, e-commerce, and other issues. We are also frequently called on to assist clients with various “business” issues, such as identifying current market and best practices, evaluating fee and distribution structures, evaluating agreements with service providers, and operational matters. In addition, we often assist managers in structuring employment and compensation arrangements both for themselves and their employees and advise them on tax planning.
We counsel fund managers on the regulatory aspects of their businesses and operations. We help our clients to address the many issues presented in the rapidly evolving regulatory environment in the United States, Europe and Asia, including investment adviser registration and regulation, the effects of other securities laws, futures and derivatives regulation, and ERISA and tax issues.
We represent all segments of this industry and evaluate fund documents for institutional investors seeking alternative investments. Our clients include major fund managers, Wall Street and international investment banking firms, brokerage firms, mutual fund and institutional management firms, banks and bank holding companies, insurance companies, family offices, government agencies, pension funds, universities, and endowments.
Our clients come to us from across the United States. We have also represented fund managers with respect to funds offered, sold, and/or organized in Europe, Latin America, Asia, and Africa. Our London office advises London-based hedge fund managers and those looking to market funds into the U.K. and EU and/or domicile funds in an EU jurisdiction. We regularly assist non-U.S. managers to establish London operations. In Hong Kong, Taiwan, and Singapore, we regularly counsel money managers in fund structuring and distribution issues, including obtaining authorizations for onshore and offshore funds, advisers, and distributors, or the availability of exemptions.
As a full-service law firm, we offer resources in a number of areas that may be important for private funds, from employment law to tax to telecom.
K&L Gates assists in selecting the appropriate structure and jurisdiction of organization (whether in the United States or in non-U.S. jurisdictions), based on (among other things) regulatory and tax issues and marketing concerns. We also assist fund managers in developing fund terms, preparing necessary documentation, negotiating with investors, and conducting closings. We have experience working with fund investors of all types including governmental pension plans, funds-of-funds, sovereign wealth investors, high net-worth investors, foundations, and Taft-Hartley plans.
In the United States, we have organized funds as limited partnerships, limited liability companies, business and other types of trusts, and Subchapter S corporations. We have also assisted clients with the organization and operation of group trusts under Revenue Ruling 81-100. In addition, we have represented registered investment companies and bank collective funds that have converted into private funds. In the United Kingdom, we are able to advise on a wide range of hedge fund structures and other funds used in the markets, such as onshore and offshore limited partnerships, LLPs, onshore and offshore unit trusts, and offshore exempt companies.
We have assisted in creating various types of sophisticated structures, including funds-of-funds, master-feeder funds, series funds, joint back office funds, and mirror and parallel funds structures. We prepare organizational documents, private placement memoranda, subscription agreements, investment advisory agreements, prime brokerage, margin agreements, swap and derivative documentation, custody and administration agreements, regulatory filings, stock exchange filings, distribution plans and agreements, various policies and procedures, annual and periodic reports, proxy materials, advertising materials, and other documents.
Our experience extends to:
We advise U.S. domestic, U.K., and offshore funds on, and assist in preparing policies and procedures relating to, a variety of U.S. and EU regulatory issues, including:
K&L Gates lawyers have represented funds and managers in a wide range of extraordinary transactions, including:
K&L Gates has represented various service providers, including:
Our work for these entities has involved negotiating and drafting various agreements, coordinating local counsel in multi-jurisdictional offerings, providing advice in connection with extraordinary private fund transactions, preparing policies and procedures, and reviewing private fund documents.
The scope and depth of K&L Gates' practice helps us keep our private fund clients up-to-date on legislative and regulatory developments affecting their business. We track a broad range of legal and regulatory developments, including legislative proposals, rule proposals, enforcement proceedings, court decisions, no-action letters, exemptive orders, revenue rulings, private letter rulings, speeches by key regulators, and regulatory trends evident from agency inspection programs. As a result of our extensive industry experience, our lawyers are able to add insight, beyond the public reporting, on industry events and developments by evaluating their impact on our private fund clients and recommending suitable and, where appropriate, strategic courses of action.
The scope of our practice also keeps us in touch with, and often directly involved in, industry developments. In addition, we maintain an active dialogue with the staff of the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the U.K. FSA, and other regulators. We speak on and attend conference panels devoted to private funds issues, periodically present breakfast briefings, seminars and webinars, and offer client alerts on current topics. In addition, one of our lawyers has written a book that discusses, among other things, the principal exemptions from the ICA on which private funds rely. In the United States, we are members of the Managed Funds Association and, in the U.K., we are members of the Alternative Investment Management Association, an international trade association for the hedge fund industry, through which we remain current on the key issues affecting the industry.