Fund Formation and Investment Management
>Hedge Funds | Private Equity Funds | Venture Capital Funds | Offshore Capital Funds
>Incubator Hedge Funds | Investment Advisors | Commodity Pool Operators and Commodity Trading Advisors
Having launched over 70 funds in each of the last three years, Riveles Wahab has extensive experience helping fund managers navigate the legal and practical challenges of structuring and launching private pooled investment vehicles in the United States and abroad. The firm advises sponsors and their principals, investors, institutions, and other participants in connection with a range of hedge, private equity, venture capital, real estate, and incubator funds. We provide comprehensive guidance to managers through all stages of the fund formation process and on an ongoing basis. Through broad exposure to the industry, we maintain expertise in evolving market standards and provide cutting edge advice on the spectrum of legal issues facing the investment management community. We routinely work with offshore counsel – in jurisdictions including the Cayman Islands, British Virgin Islands and Bermuda – to structure vehicles that enable managers to attract offshore investors and tax-exempt U.S. investors.
We work closely with emerging and established fund managers in a variety of capacities. We routinely:
- Provide advice regarding business entity selection, whether limited partnership, limited liability company, series LLC, or other form;
- Provide advice as to fund structure, strategy descriptions and parameters, compensation provisions, liquidity provisions, hurdle rates and valuation procedures, and a variety of other fund terms;
- Prepare term sheets, limited partnership operating agreements, private offering memoranda, subscription documentation, and investment advisory contracts;
- Assist in the structuring of General Partner operating agreements, addressing transferability, rights of first refusal, buy-out clauses, performance incentive structures, and the myriad other unique issues facing equity owners of sponsor entities;
- Advise on the use of finders, third party marketers, and broker-dealers in connection with capital raising, and draft and negotiate third party marketing and selling agreements as needed;
- Counsel clients on anti-money laundering requirements and procedures;
- Draft side letter agreements including most favored nation provisions;
- Prepare and submit Form D and state blue sky filings;
- Facilitate introductions to administrators, auditors, brokers, and marketers as needed based on fund size, strategy, and budget;
- Advise on fund marketing regulations including general solicitation under Rule 506(c) of Regulation D;
- Assist with state and SEC investment adviser registration and commodity pool operator registration with the CFTC/NFA;
- Provide advice as to the domestic and international tax and ERISA issues relating to funds, in consultation with tax counsel if needed;
- Provide counsel in support of the acquisition of private companies and the ongoing corporate and intellectual property needs of portfolio companies;
- Provide clients with ongoing alerts regarding regulatory changes impacting their operations;
- In connection with complex domestic and international complex tax and ERISA matters the firm is able to leverage its tax and ERISA counsel relationships to provide comprehensive support to clients.
Riveles Wahab has extensive experience counseling managers in all aspects of fund formation, structuring, and the ongoing compliance requirements of both the United States and offshore jurisdictions. Our attorneys are dedicated to helping clients successfully launch their money management businesses and navigate the rapidly changing regulatory landscape. RW represents a broad spectrum of funds with assets between $1m and $300m, employing strategies that include:
- Long/Short Equity
- Global Macro
- Complex Option Spreads
- Long Term Value Investing
- Quantitative/Statistical Arbitrage
- Volatility arbitrage
- Fund of Funds
- Tax Liens
- Hybrid Hedge/Private Equity
- Factoring/Cash Advance Payments
- Volatility Arbitrage
- Structured Notes
- Multi-strategy/Series LLC
Private Equity Funds
While private equity and hedge funds share many common characteristics, the illiquid nature of private equity investments necessitates core structural differences between the two types of funds. The firm represents an array of private equity strategies, including real estate, start-up, technology, oil and gas, renewable energy, distressed company, and debt financing, among others. The firm also assists funds in structuring portfolio acquisitions and counseling portfolio companies in connection with their ongoing corporate and intellectual property needs.
Venture Capital Funds
Riveles Wahab’s immersion in the venture capital landscape allows the firm to provide comprehensive and dedicated counsel to venture capital funds and start-up company incubators. We represent funds focused on start-up technology companies in a broad range of niche industries, including robotics, 3D printing, mobile apps, digital marketing, health tech, and artificial intelligence. We are well-equipped to assist funds across these varied industries, and others, in their formation, structuring, and ongoing operations. Our attorneys also provide focused counsel to portfolio companies in all aspects of their capital raising efforts and on matters of corporate governance, commercial contract, employment, intellectual property, technology law and other related practices that are integral to the successful operation of any business.
Offshore fund vehicles are suitable for hedge and private equity funds managers seeking to attract non-U.S. and/or tax-exempt U.S. investors. In conjunction with offshore counsel, RW has broad experience establishing offshore funds in numerous structural variations, including mini-master, master feeder, parallel, and segregated portfolio company structures. The firm has longstanding relationships with local counsel in the Cayman Islands, British Virgin Islands (BVI), Bermuda, and other offshore jurisdictions. We advise clients as to the most appropriate offshore fund domicile in consideration of fund-specific requirements and manager cost sensitivity. We have established countless open-end funds running the gamut of equity, options, forex, and futures strategies and closed-end funds focused on oil and gas lease investments, venture capital, real estate, asset backed lending, and other strategies. The firm consults with international tax counsel in structuring blocker entities and other complex offshore vehicles aimed at shielding offshore investors from “effectively connected income” and the reporting requirements associated with the Foreign Investment in Real Property Tax Act (FIRPTA).
Incubator Hedge Funds
In order to avoid the costs of launching a full-fledged fund, managers seeking to build marketable track records using their own capital often choose the incubator hedge fund model. RW frequently counsels emerging managers employing a variety of investment strategies. We help managers form incubator funds in a cost-effective manner, structured so as to facilitate the transition to a full-fledged fund.
Riveles Wahab advises clients on the many legal and compliance issues facing registered investment advisers and their affiliates. We offer comprehensive legal services to investment advisors, with expertise in regulations under the Investment Advisers Act of 1940, state investment advisory laws and FINRA rules and regulations.
RW counsels investment advisors on the following regulatory and compliance matters:
- Determining investment adviser registration requirements and identifying applicable exemptions under federal and state laws;
- Registering with state securities authorities and/or the SEC, and coordinating with regulatory authorities during the application process;
- Assisting with regulatory examinations, deficiency letters, and administrative actions applicable to registered investment advisors and investment advisor representatives;
- Providing advice and assistance in the development of compliance programs, written compliance procedures, codes of ethics, and continuing education programs;
- Developing and implementing employee compliance training regimes and advising on the supervision of personnel;
- Preparing and reviewing investment management agreements and customer disclosure documents;
- Reviewing and providing counsel on advertisements, marketing materials, and performance reports and presentations.
Commodity Pool Operators and Commodity Advisers
Riveles Wahab regularly assists commodity pool operators and trading advisers in all aspects of their operations. When no exemptions are available, we register CPO and CTAs with the NFA, prepare comprehensive NFA disclosure documents and break-even analysis, and liaise with NFA personnel throughout the registration and approval process. Our attorneys also routinely assist in developing robust compliance programs that satisfy ongoing recordkeeping, training, business continuity, and disaster recovery requirements.
Our services include:
- Structuring and establishing CPOs and pools, including the preparation of CPO operating and investment management agreements and pool offering memorandum, limited partnership agreements, and subscription documents;
- Counsel as to available exemptions under Section 4 of the CFTC Regulations;
- Obtaining NFA online registration system access after proceeding through the account establishment process;
- Preparing and filing CPO registration applications under Form 7-R and CPO principal and associated person applications under Form 8-R;
- Preparing comprehensive disclosure documents outlining CPO investment programs, fees and expenses, principal risk factors, break even analysis, redemption provisions, performance disclosures, and other required information;
- Liaison with NFA compliance personnel in connection with CPO registration;
- Ongoing counsel as to quarterly and annual compliance, reporting, and disclosure requirements.