From emerging managers launching their first funds to institutional managers responsible for multibillion-dollar fund platforms, Pepper Hamilton advises all types of hedge fund and private investment fund clients. Our clients encompass a wide range of funds, including those that invest globally in virtually any financial asset that can be readily traded as well as specialty niche funds with narrowly defined investment strategies that invest in loans, distressed debt, digital assets, derivatives, commodities, futures and illiquid securities. See our unique program for qualifying emerging hedge fund managers - ACORNTM Program (Asset management Compliance and Operational Regulatory jumpstart iNitiative).
We advise our hedge fund clients on their full range of legal and business needs, including fund formation, management company structuring, regulatory compliance and compliance audits, and transactional representation. Our attorneys also work closely with the firm’s securities litigation, tax, ERISA, private equity and investment management practices to provide services to hedge fund clients in these areas.
Pepper Hamilton attorneys are also frequent authors on the topic of hedge funds, and the firm hosts regular events, including monthly investment management and private fund roundtables that feature industry experts and offer networking opportunities. One group member has published several books on hedge fund formation issues.
Fund Formation and Management
Our attorneys have dealt with various fund models and structures, giving us a well-rounded perspective on the options available to managers. We will often use crossover structures and apply them in alternative situations, and to different assets classes, in order to give clients the best possible legal, regulatory and business fit. For example, we have adapted closed-end private equity-like fund structures for use with distressed debt and other illiquid credit assets.
For emerging managers, we work to optimize the fund structure and terms, including building a suitable compliance infrastructure, to help attract capital and grow the manager’s assets under management. For institutional managers, we advise on employment and compensation structuring, and provide complex regulatory reporting, tax and ERISA guidance.
Our practice involves advising clients on domestic and offshore fund structuring; general partner structuring and succession planning; investor rights counseling; disclosure counseling; federal and state income tax planning; SEC, CFTC and FINRA compliance; and compensation planning for principals, managers and employees.
Our hedge fund clients pursue a diverse range of strategies, and we have experience advising on hedged equity, event-driven, country and sector, global macro, direct lending, distressed debt-structured credit and leveraged loan investing, commodities-based, digital asset, commodity- and futures-correlated, and quantitative algorithmic-driven strategies, among others. We also advise funds of funds and hybrid funds investing in less liquid portfolios.
We advise hedge fund clients of all sizes on the full range of their transactions. Our experience includes representing hedge fund managers in seed investment and side-letter transactions with strategic investors, customized single investor vehicles, deal representations in connection with platform acquisitions, derivative transactions, financings and joint ventures, among others.
Our team also advises on manager lift-outs; fund and adviser mergers; spinoffs and combinations; executive compensation arrangements for management teams, including the use of ESOPs; and other wealth-protection and profit-realization strategies.
Finally, our team also represents certain governmental and tax-exempt institutional investors in their evaluation of private alternative fund investments, including the negotiation of side letters and most favored nation provisions.