Duane Morris LLP

Global reach, middle market focus

As the investment community has matured into a global marketplace, the legal and technical complexities of forming private investment funds throughout the world have proliferated due to increasingly sophisticated regulatory, securities and tax regimes internationally. As a result, the business of launching private investment funds demands top-drawer, highly current global knowledge and prowess to assist: (i) sponsors at developing private investment fund structures that are specifically tailored to their investment strategy, country of operations, and residence and special characteristics of their investors; and (ii) investors in connection with their investment activities in such private investment funds, including negotiating with existing funds for the most tax and economically efficient terms at the time of their investment, and assisting them in connection with secondary market purchases and sales of interests in such investment vehicles.

Good lawyers keep up with the technical legal issues, of course, but it is in negotiating the market-facing realities that Duane Morris' funds formation lawyers add maximum value to sponsors of funds and their investors. Our experience spans a wide range of fund types including buyout, growth equity, debt, funds-of-funds, special situations, real estate, infrastructure and other sectors, including mutual and hedge funds. Because our funds lawyers work across the entire eco-system of private equity and hedge fund constituents—from general partners and the management team to limited partner investors (including sovereign wealth funds and family offices), to lenders and consultants—we're uniquely positioned to provide support to clients from the inception of a concept through market analysis and strategy development; right through to the fund closing.

Our team can advise on optimal U.S. and cross-border fund structures, including tax advice focused on issues such as international investments, information exchange and management carried interests. We also offer expertise in worldwide regulatory regimes and securities laws and we maintain up-to-the-minute knowledge of market standard terms in fund documentation, including term sheets, offering memoranda, subscription agreements, partnership agreements and side letters. And, while Duane Morris lawyers have worked on structuring large global funds, it is often in working with middle and upper middle market private equity sponsors and hedge fund managers that our the firm's contributions are most fully realized.

With fund formation resources across our global platform tightly integrated with our deal, tax, finance, regulatory, ERISA and sector-specialized lawyers, our general and limited partner clients in the formation cycle enjoy the advantage of broad perspective on emerging trends in structures, securities issues, jurisdictional disparities, side letter negotiation, and deep current insight on the relationship equilibrium between general and limited partners.

Given the range of clients with which we are involved, the firm's formation work routinely takes us into the core working processes of our funds clients. Our fund formation and private offering attorneys focus on helping our clients launch new funds and assist them in their capital-raising efforts. All of our new fund launches are driven by state-of-the-art legal and market developments in fund formation and disclosure. Whether you are a new manager launching your first fund or a seasoned manager introducing a new product, our team will provide you with advice regarding all aspects of your operations. We will coordinate the numerous service providers involved, advise you on current and impending market developments that could affect your fund, and counsel you on applicable laws, rules and regulations. We regularly organize private investment funds, including private equity funds, hedge funds, fund-of-funds, real estate funds, debt funds, mezzanine funds, capital opportunities funds and hybrid vehicles. We also advise institutional investors concerning potential allocations to alternative investment vehicles and in connection with their engagement of investment advisers.

Since the work of our funds clients is not finished when the fund closes, neither is ours. We address the ongoing needs of our clients by providing the following services:

• Determining the proper structure for onshore and offshore funds
• Domicile selection
• Drafting comprehensive offering and organizational documents, including private placement memoranda, subscription documents and partnership agreements
• Acquisition and sales of minority and majority stakes in sponsor entities and purchase by secondary investors of portfolios of private fund interests
• Tax counseling
• Preparation of investment management agreements
• Negotiating prime brokerage, administration, custodian, and other third-party service provider agreements
• Seed and strategic investor transactions
• Fiduciary obligations and side letters
• Drafting compensation agreements
• Compliance rules and regulations of SEC, FINRA and other regulatory agencies
• Advice regarding blue-sky laws and other applicable state regulations
• Assisting institutional investors with due diligence

Through our unique proprietary events and publications, Duane Morris is recognized as a vanguard business and thought leader across all constituencies of the private equity eco-system, ranging from sponsors to limited Tax-Efficient Private Fund Structuring by Jenny Wheaterpartners, investment banks, funds-of-funds, intermediaries, service providers and lenders. We regularly convene PE business leaders, academics, legal, accounting and consulting professionals to exchange state-of-the-art thinking on the trends, influences and developments that will shape deal-making and fund formation going forward. Private Equity Inside the Minds IIAs one prime example of Duane Morris' market and thought leadership, our lead formation lawyer in London published the definitive current work in the field: Tax-Efficient Private Fund Structuring: A Practitioner's Guide for the UK and Europe [PEI, 2013], which is currently being updated. Our regular LP Institute series, conducted as a trans-Atlantic simulcast of panels in New York and London, and comprised of the leading thinkers among the investing community, is reported in our Inside the Mind of the LP publication. Our fund formation lawyers are active in such organizations as the BVCA, EVCA and ACG on a global basis.

"In my discussions with Duane Morris leaders, they frequently speak about how diversity within their firm has enabled them to better serve their diverse clients. They understand that investing in diversity is a wise business decision that positions them for the marketplace of the future."

Don Liu
Senior VP, General Counsel & Corporate Secretary
Xerox Corporation

At Duane Morris, achieving diversity is paradoxical. By supporting and celebrating the differences of our attorneys - and the individual strengths that they bring - our firm culture expands, fostering creative solutions for our clients. But diversity at Duane Morris does not mean that we have a certain number of diverse attorneys; true diversity means that it is no longer noteworthy to see diverse lawyers leading our practice groups or managing client relationships. Ascending to positions of leadership and greater responsibility and providing the highest levels of client service is simply what is expected of all our lawyers. Diversity is another strong asset that adds to our collective abilities to meet the needs of our clients.

Our vision of diversity at Duane Morris is to realize an environment in which our lawyers' outstanding qualities are not just measured by ethnicity, race, gender and sexual orientation, but more importantly, that our lawyers are remarkable as excellent attorneys above all else. Only then can we celebrate our differences while focusing on the common pursuit of legal excellence which everyone shares at Duane Morris.

To reach this goal, Duane Morris understands that the familiar diversity strategies and policies that most law firms have are needed. Without demanding results from such policies, most law firms are bound to fail in even achieving numerical hiring and retention goals. Duane Morris has been proactive and ambitious in its efforts to improve diversity at the firm, and has set deadlines for reaching the milestones which mark our progress. To create a more diverse law firm, Duane Morris is:

• Committed to strategically increasing our diversity levels, which is currently at 10 percent.
• Bringing together our Diversity Committee and our Hiring and Retention Committee to raise diversity as an important factor in our hiring decisions.
• Dedicated to improving retention by building upon our monitoring and mentoring program for all diverse associates.

Combining new initiatives with our longstanding diversity efforts, Duane Morris has seen increasingly positive results. In the Minority Law Journal's annual diversity survey of the nation's largest 260 firms, Duane Morris continued to improve its regional and national ranking, rising to number 136 of all firms surveyed. Our strides in Philadelphia are encouraging; in a city known for both the racial diversity of its population and the lack thereof in its law firms, Duane Morris is one of only two law firms to exceed the national average of minority partners at all law firms. Additionally, Duane Morris leads all national law firms based in Philadelphia in the number of Latino partners. Nearly 30 percent of all of our attorneys are women, and more than 20 percent of our partners are women.

In our approach to diversity, progress in racial, gender and cultural diversity cannot be measured in numbers alone. Duane Morris has focused our diversity initiatives on both increasing the number of diverse associates and addressing the challenges diverse attorneys face in building lasting careers and rising to senior and leadership positions. While several of our key practice groups are led by diverse partners and female partners, Duane Morris endeavors to create a culture which will foster a deep pool of such attorneys who can then develop into the firm's future leaders. Duane Morris understands that simply hiring diverse associates will not change the diversity of the firm; Duane Morris is working to mentor and retain diverse associates so that our progress in racial, gender and cultural diversity is also reflected at the highest levels of leadership within the firm.

Our progress on gender diversity has been profound. We have no glass ceilings: women hold positions of leadership at all levels of management at the firm. Women lead a number of our key practice groups, including our Energy, Immigration and International practices, and serve on the firm's Executive Committee. The success of our female attorneys at Duane Morris has not gone unnoticed. Barbara Adams was chair of the firm's Finance Practice until her appointment by Pennsylvania Governor Edward Rendell to serve as General Counsel of the Commonwealth. In 2004, our longtime General Counsel, Gene E.K. Pratter, was approved by the United States Senate and is now a judge for the U.S. District Court for the Eastern District of Pennsylvania.

Our efforts to improve diversity extend beyond our firm's walls. The chair of our Diversity Committee, Nolan N. Atkinson, Jr., recognized the lack of diversity in Philadelphia's legal community and formed the Philadelphia Diversity Law Group. Nolan now serves as the chair of the organization, a consortium of 25 law firms and corporations that commits to employing at least one diverse first-year law student each as a summer associate. From this program, law students of diverse backgrounds gain access to what was once an exclusive legal community, and now have the opportunity to learn and develop their legal careers with experience at Philadelphia's top law firms.

In addition to our involvement in the Philadelphia area, Duane Morris has increased our presence at national conferences and events focused on diversity. We sponsor the Hispanic National Bar Association and its job fair. Duane Morris is also a longtime supporter and sponsor of the Equality Forum, a national gay and lesbian rights organization. Duane Morris continues to sponsor the Minority Corporate Counsel Association, and is active in other associations of diverse attorneys including: the Asian American Bar Association of the Delaware Valley; the Charles Houston Bar Association; Cuban Bar Association; Korean American Lawyers Association; National American Indian Housing Counsel and the National Bar Association.

The challenge of improving gender, ethnic and cultural diversity at Duane Morris is an ongoing effort that has the support of the entire firm. Duane Morris has been at the vanguard in supporting gender diversity throughout the firm beginning a generation ago. Our diversity programs are leading to similar success in improving racial and national origin diversity at Duane Morris. But even as we share these examples of Duane Morris attorneys and our involvement in numerous legal events, associations and programs for diversity, our hope is that such examples will no longer be necessary to mention in the future. We hope that through our efforts, and the efforts of other law firms, these stories become so common that they are no longer the remarkable accomplishments they are today, but simply routine aspects of the legal world tomorrow.