Practice/Industry Group Overview
With insight and comprehensive resources, Sutherland serves hedge funds, private equity and debt funds, funds of funds and their sponsors.
In today’s volatile market and shifting regulatory landscape, private fund sponsors, advisers, and investors alike need counsel to help navigate the terrain. Sutherland attorneys provide comprehensive guidance for investment funds and investment advisers—from fund formation, structuring and tax considerations, and investing, to ongoing operations and compliance. Sutherland’s customized, interdisciplinary teams work closely with clients to develop innovative solutions specific to clients’ objectives, expectations and requirements.
We counsel clients on forming management companies, drafting operating agreements and structuring compensation, with careful attention to tax considerations. We structure funds, including limited partnerships, limited liability companies, onshore and offshore funds, master/feeder structures and funds of funds. We regularly prepare private placement memoranda, partnership agreements, subscription booklets, investment management and sub-advisory agreements, brokerage agreements, custody agreements and side letters, tailoring the documents to fit the specific needs of the client. We advise on operational issues, including valuation, trading, derivatives, anti-money laundering, privacy, intellectual property and marketing, as well as assist our clients in navigating the complex and ever-changing tax and regulatory regimes. We counsel clients on all federal regulations applicable to funds including, the 1933 Act, the 1934 Act, the 1940 Act, the Advisers Act, the Commodity Exchange Act, the Dodd-Frank Act, as well as FINRA regulations. We have deep experience in ERISA, FATCA and FCPA. Our well-established relationships with regulators allow us to be effective advocates for our clients.
Financing arrangements, third-party service provider contracts, diligence, asset purchases, joint ventures, co-investment arrangements, and strategic transactions complement our formation, organizational, regulatory, compliance and tax work, making us a one-stop shop for private investment fund sponsors. We take a comprehensive approach that brings together our colleagues from across practice areas to help anticipate issues before they arise and allows clients to take advantage of new opportunities.
Regulatory experience. Our team includes former staff members at the SEC, CFTC and FINRA, as well as attorneys who have worked as in-house counsel or compliance officers for private and public funds. This experience and the connections it brings make our team invaluable business partners to our clients.
Comprehensive service. We guide clients from fund formation to launch to investments and distributions concluding with the winding-up of the fund. Our clients range from stand-alone portfolios managing less than $10 million, to $10 billion portfolios of multi-service financial institutions. We have formed funds using an array of structures including master/feeder structures, funds of funds, leveraged funds, domestic and offshore funds of every type.
Practical know-how. Clients come to us for advice on day to day operational issues, such as registration and compliance, as well as examinations, investigations and disciplinary proceedings brought by regulators.
Sophistication. We advise funds that use various portfolio strategies such as long/short equity, credit, leveraged debt and multi-strategies, and private equity, including venture capital, LBO funds, management buyouts, mezzanine funds and sector specific funds focusing on real estate and commodities.
The right structure. Our corporate, securities, tax and ERISA teams provide guidance on structuring management organizations, including determining the best organizational structure, whether it be a limited partnership, limited liability company or corporation.
Responsiveness. Listening to our clients and understanding their needs enables us to structure the most appropriate funds and then help on all aspects of fund operation and management.
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, funds excluded from 1940 Act registration under 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-US investments, real estate (including REITs), timber
- Document preparation including PPMs and limited partnership agreements, sub-advisory agreements, side letters, subscription agreements, prime brokerage, placement agent agreements and other documents necessary to have a successful fund launch
- Corporate 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-US jurisdictions, and other FINRA, ERISA, and AML 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, CCO reporting and forensic testing, mock examinations, annual reviews and training programs, internal controls and risk management
- Knowledge of all relevant federal legislation including the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, 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 and Patriot Act
- 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 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 Reg D and Reg 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 counter-parties 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
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 the private funds.
Sutherland attorneys counsel private equity fund in $390 million purchase of franchise.
Our lawyers represented a large private equity fund in its $390 million acquisition of the Church’s Chicken franchise.
Sutherland represents Olympic Resource Management in forming $180 million timberland fund.
Sutherland represented Olympic Resource Management LLC (ORM) in the formation of a $180 million timberland investment fund for domestic and foreign investors.
Sutherland helps restructure private hedge fund of fund arrangement.
Sutherland helps restructure hedge fund of fund arrangement, including drafting revised a private placement memorandum (PPM), LP agreement, subscription agreement and related documents and providing related regulatory advice.