Practice Areas & Industries: Eversheds Sutherland (US) LLP

 




Private Investment Funds Return to Practice Areas & Industries

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Practice/Industry Group Overview

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
  • Tax
    • 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

Take Action
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.

Selected Experience


Represented a leading fixed-income fund manager in the formation of a number of private equity and hedge funds.

Represented a leading U.S. fixed-income private fund manager in the formation of domestic and offshore hedge funds and private equity funds to deploy the manager’s direct lending platform.

Represented a leading asset management firm in the establishment of a strategic relationship with a European distressed assets firm.

Represented a leading global asset management firm in the establishment of a strategic relationship with a European distressed assets firm. The relationship involved the provision of investment capital, debt to meet the European firm’s working capital needs, and the acquisition of an equity interest in the European firm.

Represented a sovereign client in the creation of two bespoke funds of hedge funds to deploy $600 million of capital opportunistically in credit strategies.

Represented a sovereign client in the creation of two bespoke funds of hedge funds to deploy $600 million of capital opportunistically in credit strategies.

Represented a leading participant in the Lloyd's market in the establishment of a private equity fund.

Represented a leading participant in the Lloyd’s of London insurance market in the creation of a private equity fund to participate in Lloyd's syndicates.

Represented a U.S. asset management firm in the creation of its first hedge fund to invest in equity markets.

Represented a U.S.-based multi-strategy hedge fund firm in the creation of its first fund to invest in equity markets. In addition to the fund launch, we assisted the firm in establishing its relationship with a new investment team to help manage the fund.

Represented a hedge fund manager in restructuring its flagship hedge fund.
Represented a U.S.-based multi-strategy hedge fund firm in the restructuring of its flagship hedge fund family to achieve operational and regulatory efficiencies.

Represented hedge fund manager in the creation of a fund to invest in non-U.S. solar assets.

Represented U.S.-based multi-strategy hedge fund firm in the establishment of a closed-end fund to invest in non-U.S. solar assets.

Represented a hedge fund manager in the creation of a fund to invest in a U.S. real estate development project.

Represented a U.S.-based multi-strategy hedge fund firm in the establishment of a closed-end fund to invest in the debt of U.S. real estate development projects.

Helped a long-established institutional fixed-income investment adviser in the creation of a new distressed-debt hedge fund management venture and in the fund's formation.

Represented a long-established institutional fixed-income investment adviser in the creation of a new distressed-debt hedge fund management venture and in the formation of the hedge fund to be managed by that venture.

Advised a Bermuda-based insurance company on more than $150 million of capital commitments to three loan origination funds employing a private equity structure.

Represented a Bermuda-based insurance company in more than $150 million of capital commitments to three loan origination funds employing a private equity structure. The advice included resolving complex tax issues inherent in the investments.

Counseled a leading long-short equity hedge fund on sophisticated issues related to the reporting of derivatives positions.

Advised a leading long-short equity hedge fund on sophisticated issues related to the reporting of certain derivatives positions.

Represented a multi-strategy investment firm in connection with secondary transactions to acquire hedge fund and private equity portfolios.

Represented a multi-strategy investment firm in connection with the acquisition of hedge fund and private equity portfolios in secondary transactions.

Advised a non-U.S. financial institution on carried interest potentially receivable by a U.S. employee from a private equity fund sponsored by the institution.

Advised a non-U.S. financial institution in connection with the monetization of carried interest potentially receivable by a U.S. employee from a private equity fund sponsored by the institution.

Sutherland attorneys counsel private equity fund in $390 million purchase of franchise.

Our lawyers represented a large private equity fund in its acquisition of the Church’s Chicken franchise. The value of the asset acquisition totaled $390 million.

Advised Olympic Resource Management on the formation of a $180 million, REIT-structured timber fund for acquiring property in the Pacific Northwest.

Advised Olympic Resource Management, LLC on the formation of a $180 million timber fund focused on acquiring property in the Pacific Northwest using a real estate investment trust (REIT) structure with domestic and foreign investors.

Sutherland helps restructure private hedge fund of fund arrangement.

Sutherland helps restructure a hedge fund of fund arrangement, including drafting a revised private placement memorandum (PPM), LP agreement, subscription agreement and related documents and providing related regulatory advice.

Represents a fund manager in the creation of a fund to invest in U.K. solar assets.

Represents a fund manager in the creation of a fund to invest in U.K. solar assets.

Represents a leading provider of specialist insurance services in the creation of a private equity fund to invest in the Lloyd's marketplace.

Represents a leading provider of specialist insurance services in the creation of a private equity fund for a leading institutional investor to invest in the Lloyd's marketplace.

Helps a state pension fund create bespoke arrangements to invest in emerging hedge fund managers, particularly minority and women-owned enterprises.

Represents a state pension fund in the creation of bespoke arrangements to invest in emerging hedge fund managers, particularly minority and women-owned enterprises (MWEs).

Represents a leading asset management firm in a joint venture to source and manage European assets.

Represents a leading asset management firm in a joint venture to source and manage European assets.

Represents a leading asset management firm in the sale of a private fund portfolio related to the windup of a fund-of-funds vehicle.

Represents a leading asset management firm in the sale of a private fund portfolio in connection with the windup of a fund-of-funds vehicle.
 


 
 
Articles Authored by Lawyers at this office:

FINRA Is Ready to Lace-up and Focus on “Blocking and Tackling”: FINRA’s 2017 Priorities and Related Enforcement Actions
Peter J. Anderson,Eric A. Arnold,Bruce M. Bettigole,Patricia A. Gorham,Olga Greenberg,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Neil S. Lang,S. Lawrence Polk,Brian L. Rubin,Amelia Toy Rudolph,Sarah Razaq Sallis,Holly H. Smith,W. Scott Sorrels,John H. Walsh, January 30, 2017
As the football season was winding down, on January 4, 2017, the Financial Industry Regulatory Authority (FINRA) published its 2017 Annual Regulatory and Examination Priorities Letter.1 According to FINRA President and CEO, Robert Cook, this year’s 11-page letter focuses on “core...

SBA Adopts Final Passive Business Rule Impacting BDCs with SBIC Subsidiaries
Cynthia R. Beyea,Steven B. Boehm,Terri G. Jordan,Cynthia M. Krus,Ingrid E. Messbauer,Lisa A. Morgan,Harry S. Pangas,Sara Sabour, January 24, 2017
On December 28, 2016, the Small Business Administration (SBA) released the final version of the Passive Business Rule (the New Rule) under § 107.720 of the small business investment company (SBIC) regulations.1 Among other provisions, the New Rule expands the permitted use of holding companies...

SEC Adopts Amendments to Regulation S-X Applicable to BDCs
Cynthia R. Beyea,Steven B. Boehm,Cynthia M. Krus,Lisa A. Morgan,Harry S. Pangas, December 14, 2016
On October 13, 2016, the Securities and Exchange Commission (SEC) issued a release adopting final rules to modernize and enhance the reporting and disclosure of information by registered investment companies (the Final Rules). Though the Final Rules primarily address the reporting and disclosure...

SEC Adopts Rules to Modernize Information Reported by Registered Investment Companies
Frederick R. Bellamy,Cynthia R. Beyea,Steven B. Boehm,James M. Cain,Cynthia M. Krus, December 09, 2016
On October 13, 2016, the Securities and Exchange Commission (the SEC) issued a release adopting final rules to modernize and enhance the reporting and disclosure of information by registered investment companies (the Final Rules).1 The Final Rules are part of the SEC’s initiative to enhance...

SEC Adopts Liquidity Risk Management Rules for Mutual Funds and Other Open-End Investment Companies
Frederick R. Bellamy,Cynthia R. Beyea,Thomas E. Bisset,Steven B. Boehm,James M. Cain, November 14, 2016
On October 13, 2016, the SEC approved new Rule 22e-4 under the Investment Company Act of 1940, as amended (the 1940 Act), which will require certain open-end investment companies other than money market funds, to adopt and implement written liquidity risk management programs.1 In addition, new Rule...

SEC Adopts Changes to Form ADV and Books and Records Rules
Eric A. Arnold,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Holly H. Smith, September 19, 2016
On August 25, the Securities and Exchange Commission (the SEC) adopted amendments to Form ADV Part 1 that will require SEC-registered investment advisers to provide a significant amount of new information.1 The SEC adopted these amendments to Form ADV to improve the depth and quality of information...

ISDA Publishes Variation Margin Protocol
Brian Barrett,James M. Cain,Catherine M. Krupka,David T. McIndoe,Mark D. Sherrill, August 24, 2016
On August 16, 2016, the International Swaps and Derivatives Association, Inc. (ISDA) published the ISDA 2016 Variation Margin Protocol (VM Protocol). The VM Protocol is intended as a tool to help market participants that will be subject to regulatory variation margin requirements,1 and their...

Venture Global LNG Closes Additional $15 Million Funding Deal
, August 24, 2016
Venture Global LNG, Inc., announced that it has closed a fifth round of equity investment, raising additional capital of $15 million and bringing the total capital raised to date to over $280 million. The proceeds will fund Venture Global LNG’s proposed 10 million tonnes per annum (MTPA)...

Shell Delays FID for Lake Charles LNG Export Terminal
, July 29, 2016
Reuters reports that Shell has indefinitely delayed a final investment decision (FID) for its affiliate BG Group’s proposed Lake Charles LNG export terminal at Lake Charles, La. In February, Shell Canada, primary sponsor of LNG Canada, indefinitely postponed an FID on its proposed LNG export...

Questions Remain Regarding Impact of Brexit on Fund Managers
, July 27, 2016
Although the dust has somewhat settled following the historic “leave” vote on June 23, 2106, in which voters in the United Kingdom elected to leave the European Union, many questions remain. Of particular importance to fund managers based in the UK is the question of Brexit’s...

SEC Issues Guidance on Business Continuity Planning for Registered Investment Companies
Cynthia R. Beyea,Steven B. Boehm,Michael B. Koffler,Cynthia M. Krus,Lisa A. Morgan, July 15, 2016
On June 27, the staff of the Securities and Exchange Commission’s (Commission or SEC) Division of Investment Management (IM) issued a Guidance Update on business continuity planning for registered investment companies (funds).1 The Guidance Update provides the staff’s view on what funds...

Director of SEC’s Division of Enforcement Promises More Enforcement Actions against Private Equity Fund Advisers
, June 02, 2016
In a recent speech, Andrew Ceresney, the Director of the SEC’s Division of Enforcement, discussed his division’s focus on the private equity industry, reviewing eight recent enforcement actions that Enforcement’s Asset Management Unit has brought against private equity advisers,...

Major Companies Invest In Ride-Hailing Companies
, May 27, 2016
Two major car manufacturers have recently invested in ride-hailing companies, signaling their interest in and commitment to the mobility services market. Volkswagen AG is investing $300 million into Gett Inc., and Toyota Motor Corp. is investing in Uber Technologies Inc. Toyota’s partnership...

FINCEN Customer Due Diligence Rules Exclude Most Private Funds from Definition of Legal Entity Customers
, May 25, 2016
On May 5, 2016, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued final rules (the “Final Rules”) on customer due diligence requirements for banks, broker-dealers, mutual funds, and futures commission merchants and introducing...

Changes to Trading Documentation Will be Necessary to Recognize Regulatory Stays of Termination Rights
, May 11, 2016
On May 3, 2016, the Federal Reserve Board released a proposed rule (Proposed Rule) which would “require U.S. global systemically important banking institutions (GSIBs) and the U.S. operations of foreign GSIBs to amend contracts for common financial transactions to prevent the immediate...

Venture Global LNG Closes Additional $55 Million Funding Deal
, May 06, 2016
Venture Global LNG, Inc. (Venture) announced the successful closing of its fourth round of equity investments to fund its proposed liquefaction and LNG export terminal on the Mississippi River in Plaquemines Parish, La. According to the press release, the “round also is notable for adding to...

FinCEN’s Long-Awaited Beneficial Owner Due Diligence AML Rule Could Be Finalized Soon
, May 03, 2016
Earlier this month, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, submitted its long-awaited Final Rule on due diligence of beneficial owners of customer accounts to the White House Office of Management and Budget. This new...

U.S. Senators Introduce Legislation to Tighten Schedule 13D Reporting Requirements and Increase Oversight of Activist Hedge Funds
, April 04, 2016
Two U.S. Senators recently introduced legislation that would result in significant changes to Schedule 13D reporting requirements. According to the press release announcing the introduction of the legislation, the proposed changes are designed to enhance transparency, protect companies from...

SEC Issues Order To Solicit Comments On FINRA Capital Acquisition Broker Proposal And Determine Whether To Approve Or Disapprove The Proposal
, March 28, 2016
At the end of last year, the SEC issued a notice of a proposed FINRA rule change that would establish a separate rule set for broker-dealers that meet the definition of a “capital acquisition broker” and elect to be governed under such rule set. Last week, the SEC issued an order in...