Arnold & Porter Kaye Scholer LLP

Kaye Scholer's Investment Funds Group serves the needs of a global investment management industry by providing a full range of legal services to a diverse group of international clients. We focus on the organization, fund raising, compliance and administration of investment funds, as well as on the structuring, operation, purchase, sale and financing of investment managers and advisers.

The group helps structure and document a variety of pooled investment vehicles. We advise on structuring and registration matters for US, UK and European funds and their advisers. We also advise on a wide range of compliance and exemptive issues, including discussions with the SEC, the FSA and other regulators.

The Investment Funds Group includes the following focus areas:

Private Equity Funds - Representing sponsors and managers of and investors in private equity funds and funds of funds, venture capital funds, distressed asset funds, leveraged buyout funds and real estate funds.

Hedge Funds - Advising clients in all aspects of the structuring, offering and ongoing operations of hedge funds, funds of hedge funds and related products, as well as in the structuring and negotiation of derivatives.

Ownership and Compensation Arrangements - Structuring investment management and advisory firms and advising them in the structuring and day-to-day operation of their businesses.

Compliance - Creating compliance programs, reviewing existing procedures and assisting clients in examinations and inquiries by securities and financial regulators.

We have worked on many collective investment vehicles for a variety of markets, taking into account the tax and regulatory implications of attracting investors from the United States, Asia, Latin America, the Middle East and Europe, and making tax-efficient investments in many different countries.

The Investment Funds Group follows a multi-disciplinary approach to its representations, an important element in the comprehensive services we provide to our clients. We work closely with attorneys in the firm's tax, benefits and compensation, and trust and estates practices, as well as mergers and acquisitions, restructuring, financing and capital markets practices. In addition, many attorneys in our litigation department have substantial experience in representing investment managers and advisers, broker-dealers and other service provider clients.

Private Equity Funds

We advise sponsors and placement agents in structuring and marketing private equity funds. Our practice includes buyout funds, venture capital funds, special situations funds, emerging market funds and real estate funds, including a variety of both onshore and offshore structures. Our representation of both general partners and limited partners on an international basis provides us with a unique understanding of private equity funds.

We represent the sponsors of a number of well-known private equity funds. We work with general partners to anticipate and address the regulatory and economic needs of investors. We work closely with our private equity transactional lawyers to assist funds as they seek to build value in their portfolio companies.

Our cross-border tax lawyers are experienced in the partnership tax and allocation rules that are used in creating and drafting private equity fund documents and tax-efficient arrangements for their principals, including dealing with unrelated business taxable income rules, passive foreign investment company rules, controlled foreign corporation rules and the US taxation of non-US investors.

In addition, our employee benefits lawyers advise on compliance with fiduciary responsibilities under ERISA, avoiding prohibited transactions, and qualifying for regulatory exemptions. We also provide counsel on the investment of ERISA "plan assets" and the requirements of the venture capital operating company and real estate operating company exceptions to the plan asset regulation.

As part of our work with limited partners, we represent institutional investors in establishing investment vehicles dedicated to allocating capital on a co-investment basis.

We have represented sponsors in organizing funds of funds that include investments in buyout funds, venture capital funds and distressed debt funds. We also assist in the review of the documentation relating to a fund's commitments to underlying investment funds.

Private equity funds and hedge funds have begun to converge in their investment objectives, structures and terms. We represent funds which have pioneered this convergence. We are familiar with both the forces behind this convergence, as well as the structural, tax, ERISA and regulatory requirements that lead to their success.

Hedge Funds

We represent sponsors, investors and placement agents in connection with the structuring and operation of onshore and offshore hedge funds, funds of funds, and principal-protected funds.

We work closely with our clients to develop structures that optimize investment and operational flexibility. We represent hedge funds and funds of funds with widely different strategies, including hedge funds of funds, long/short equity, global fixed income, distressed debt, industry sectors such as health care and energy, and special geographic sectors.

Establishing and launching a new hedge fund requires the drafting of organizational documents, offering memoranda, operating agreements, advisory agreements, administration agreements, subscription agreements, placement agreements, side letters, registration forms and compliance manuals, together with the review of sales materials and advice and filings under federal and state securities laws, commodities laws, international securities laws and tax laws.

Once a hedge fund has launched, we provide ongoing counsel regarding a variety of issues that may arise including those related to large trader reporting requirements, conflicts of interest, derivatives, spin-offs and employment. We also counsel clients on questions relating to inside information, market abuse and short sale questions.

We provide ongoing assistance with trading and investment documentation, including:

• financing agreements providing for daily operations and redemptions;
• credit derivatives to obtain protection on specific assets;
• equity derivatives to facilitate leveraged synthetic exposure to securities; and
• total return swaps.

Ownership and Compensation Arrangements

The expanding market for investment funds includes numerous opportunities for strategic investment and consolidation. We represent investment managers and advisers in mergers and acquisitions, joint ventures, financings and related corporate transactions. We are familiar with the wide variety of financial, structural, tax, cross-border and regulatory issues that these transactions present.

We work closely with the firm's tax, executive compensation and estate planning attorneys to assist clients in designing and implementing incentive compensation and equity ownership arrangements for principals of investment managers and advisers, both in connection with our mergers and acquisitions work in this dynamic industry and our work for fund sponsors generally.

Compliance

Compliance and awareness of impending regulatory changes are critical to our clients' success.

Accordingly, we advise our clients on the full spectrum of regulatory issues, including:

• United States - Securities Act, the Investment Company Act, the Investment Advisers Act and the Commodities Exchange Act;
• United Kingdom - Financial Services and Markets Act 2000;
• Germany - Investment Act and Investment Tax Act; and
• Europe - Markets in Financial Instruments Directive and Capital Requirements Directive.

We conduct comprehensive reviews of investment management and advisory firms, reviewing all aspects of a client's business. These reviews are tailored to the specific needs of each client, in order to help them improve their procedures in the areas of insider trading, personal investments, inter-fund transfer and allocation practices, ethical wall procedures, and books and records requirements. Our compliance work also takes the form of due diligence reviews of investment management and advisory firms that are candidates for acquisition.

We work actively with various regulators around the world to reduce unnecessary regulation and generally streamline the regulatory process. We routinely submit comments on SEC, FSA and EU consultation and rule-making processes to promote simpler regulation of investment funds and their advisers.

Kaye Scholer is committed to fostering diversity in a positive and supportive work environment. We firmly believe that a diverse group of lawyers, including differences in race, ethnicity, gender, sexual orientation, disability, religion or any other underrepresented status in the legal community, increases the value of our law firm, strengthens our firm's ability to attract talented individuals, and enhances our ability to retain and serve our clients.

Our commitment to cultivate and maintain a diverse workforce remains at the core of our recruiting, retention and promotion efforts as we strive to maintain a firm culture that taps into the potential of every Kaye Scholer employee.

The Diversity and Recruiting Committees work together, recruiting at job fairs such as the BLSA Northeast Job Fair and the DuPont Minority Job Fair. We conduct on-campus interviews at law schools, and we actively seek out diverse candidates at every school. Kaye Scholer is an original signatory to the Statement of Goals of New York Law Firms and Corporate Legal Departments for Increasing Minority Hiring, Retention and Promotion, and we have surpassed the goals in each of the years of their existence. We are also an original signatory to the Statement of Goals of New York Law Firms and Corporate Legal Departments for the Retention and Promotion of Women, and we have participated in the City Bar Fellowship Program since its inception.

Kaye Scholer was the recipient of the 2006 "Black Entertainment and Sports Lawyers Association Law Firm Diversity Award" at the 26th Annual Conference of the Black Entertainment and Sports Lawyers Association (BESLA). The "Conference Chairs' Welcome," published in the "Conference Journal" distributed to all attendees, said about Kaye Scholer: "Our Law Firm Diversity Award recipient this year is the law firm of Kaye Scholer, LLP. With offices from New York to Shanghai, and points in between, this firm has made significant contributions to the entertainment legal community. We acknowledge Kaye Scholer for being a consistent supporter of BESLA and its programs, a corporate sponsor of BESLA's conferences, and for its continuous efforts in the areas of diversification by recruiting and hiring qualified minority professionals, including in particular, members of this organization."

Our partners' commitment to diversity extends beyond the firm. Sheila Boston, a partner in Kaye Scholer's Litigation Department, was named the Chair of the Committee on Recruitment and Retention of Lawyers, a committee devoted to enhance diversity in the profession at the Association of the Bar of the City of New York. This special committee is charged with encouraging the hiring, retention and promotion of professionals from all walks of life in New York law firms and corporate legal departments. All of us at Kaye Scholer take great pride in her appointment, and we pledge our full support to the work of her committee in this important area.

Last year Kaye Scholer entered into a partnership with the Bronx School for Law, Government and Justice. Kaye Scholer attorneys have coached the school's mock trial team in a state competition, conducted a mock labor negotiation with the students, and judged several moot court competitions at the school. Next year we will initiate a mentor program.

Other organizations in which our partners are involved include the Asian American Bar Association of New York, Committee 504 (Minorities and Women in the Profession) of the ABA's Intellectual Property Law Section, Legal Momentum, The Women's Legal Defense & Education Fund, Inwood House, Just One Break, National Association of Women Lawyers (NAWL), American Bar Association's Section of Litigation's Women In Products Liability (WIPL), National Hispanic Bar Association, and Black Entertainment and Sports Lawyers Association (BESLA).

We are proud to have received several awards recognizing our commitment to offering equal employment opportunities to all.

Diversity Statement from Managing Partner

At Kaye Scholer LLP we are proud of our commitment to diversity and equal opportunity. We work actively to foster an inclusive work environment, support minority-owned vendors and enrich our firm's culture through our diversity and inclusion initiatives for lawyers and staff.

The firm's commitment to diversity and equal opportunity is reflected in its mission to attract, retain, and advance a diverse group of lawyers and staff. Kaye Scholer is home to individuals from varied cultural, educational, religious and ethnic backgrounds, making it a vibrant and engaging community. We strongly believe that promoting diversity in background and perspective strengthens our entire firm.

At Kaye Scholer, we recognize that diversity among our professionals is a necessity if we are to best serve the needs of our increasingly diverse clientele. Kaye Scholer enthusiastically supports programs designed to ensure that our own makeup adequately reflects the growing ranks of diversity in business today. Our commitment begins early, when we urge summer associates to meet with more senior lawyers to develop enduring mentoring relationships. Our affinity group programs continue to support our attorneys as they develop in their careers. Kaye Scholer has an active Diversity Committee consisting of approximately thirty attorneys of all levels of seniority, including partners, counsel, senior attorneys and associates. Working through various subcommittees, the members of the Diversity Committee assist in attracting and hiring a diverse class of attorneys, promote community-building, and provide training as well as host events that promote awareness of diversity issues.

We at Kaye Scholer are committed to fostering and maintaining an inclusive work environment where individual differences among us are respected, valued and recognized as a source of strength of the firm. We believe that offering diverse perspectives to our clients enhances our counsel and sparks intellectual energy within the firm.

Barry Willner
Managing Partner

Diversity Training

All Kaye Scholer lawyers participate in the Firm's mandatory diversity training program. Diversity training sessions are composed of a combination of partners, counsel and associates from various departments in the Firm. Through discussion, videos and case studies, the program enables participants to gain insight into the different viewpoints and workplace challenges of both their peers and others.

Mentoring Program

In 2008, the Firm rolled out a revised mentoring program designed to assist associates' career development and enhance their experience at the Firm. Highlights of the program are:

• all associates are paired with mentors for a period of at least two years at a time
• associates are encouraged to select rather than be assigned mentors
• virtually all mentor/mentee communications are confidential

In addition, there are four Program Coordinators who monitor the mentoring relationships to ensure that mentors and mentees are meeting in a timely fashion, to ensure that the mentor-mentee pairings are appropriate and to evaluate the extent to which the program is functioning successfully.

Ombuds Program

Recently, the Diversity Committee established an Ombuds Program, a confidential resource for all attorneys. The Ombuds Representatives are neutral confidants who advocate not for a specific individual, but for equity, fair process and compliance with firm policy and procedure. The program was established with a special emphasis on issues concerning women, minorities, sexual orientation and religion. The Ombuds Representatives are available, however, to assist all attorneys in resolving work-related concerns in an informal, confidential and impartial manner. The primary goal of the program is to improve the overall working environment at Kaye Scholer.

Affinity Groups

The Firm recognizes the importance of active affinity groups for lawyers who share common interests or backgrounds. With the Firm's support, our attorneys have voluntarily formed African American, Latino, Asian, Women and Lesbian, Gay, Bisexual and Transgender (LGBT) affinity groups. Participation in these affinity groups accelerates professional development, provides additional mentoring opportunities and increases networking opportunities. 

Diversity Events

Kaye Scholer is a proud participant and sponsor of a wide range of programs that celebrate and promote diversity in the legal community. The Firm's Diversity Committee believes that exposure to diverse speakers and points of view promotes professional development and growth. The Committee has hosted several speakers, panel discussions and movie nights. Recent speakers include Clarence B. Jones, a speech writer and attorney for Martin Luther King Jr., as well as lawyers from the NAACP Legal Defense Fund, the Puerto Rican Legal Defense and Education Fund (PRLDEF), the Asian American Legal Defense and Education Fund (AALDEF) and from Lambda Legal.

Movie nights have become a tradition at the Firm. The Diversity Committee arranges screenings of thought-provoking films such as "Crash" and "The Namesake." The movie is followed by a lively and stimulating discussion of the diversity and community issues that the film addresses.