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October 6, 2017

Seward & Kissel Study Shows Side Letter Usage Rising Among Newer Managers

Side letter agreements supplementing or modifying the standard terms of a fund’s offering memorandum, subscription agreement or constitutional documents to grant preferential treatment to an individual investor, generally as a precondition of a large investment, often provide a revelatory view into the current market dynamics of the hedge fund industry. In its most recent Hedge Fund Side Letter Study, Seward & Kissel LLP found that the hedge fund industry’s use of side letters has dramat Read More »

Best Practices to Avoid Regulatory Scrutiny for Hedge Fund Managers Structuring an Outsourced Compliance Relationship (Part Two of Two)

Both investors and regulators demand that hedge fund managers have a tailored, robust and evolving compliance program in place, but meeting this expectation can be costly. For managers with limited resources, outsourcing some or all of the chief compliance officer’s role and compliance functions to third-party consulting firms can be a more practicable way to meet compliance obligations. Over the last few years, however, the Securities and Exchange Commission has been scrutinizing more closely Read More »

Former Highbridge Capital Management GC Joshua Cohen Joins Kirkland & Ellis as Partner

Joshua Cohen has joined Kirkland & Ellis’ Investment Funds Group as a partner in the firm’s Chicago office. Cohen’s areas of expertise include the formation, structuring and maintenance of open and closed-end private funds, including, hedge funds, private equity and credit funds, hybrid funds, fund of funds vehicles and liquid alternative mutual funds. Cohen’s  knowledge also includes the Investment Advisers Act, the Securities Act, the Investment Company Act, the Commodities Exchan Read More »

Key Elements of a Comprehensive Hedge Fund Disaster Recovery Plan

Hedge fund managers reasonably tend to focus the better part of their time and resources on fund performance, strategy execution, attracting and retaining top personnel, and developing robust business infrastructure, but increasingly, disaster recovery is—and should be—absorbing a growing share of hedge fund managers’ top of mind business concerns. According to the Identity Theft Resource Center, as of the first week of October, this year has seen over 1,000 data breaches across nearly all Read More »

Best Practices for Private Equity Managers Entering into Joint Ventures with Investors (Part Two of Three)

Large institutional investors with designated in-house teams tasked with evaluating investment opportunities and overseeing allocations have begun partnering with private equity managers to form joint ventures—vehicles into which they can channel their deep resources and experience to take on an even more active role in deploying significant assets. Joint ventures can be beneficial for both large institutional investors and private equity managers because the permanent agreement to purchase, m Read More »

September 22, 2017

Best Practices to Avoid Regulatory Scrutiny for Hedge Fund Managers Structuring an Outsourced Compliance Relationship (Part One of Two)

The regulatory environment has changed for hedge fund managers, and there is an expectation from investors and regulators that managers have a tailored, robust and evolving compliance program in place. This is not, however, an inexpensive undertaking, and managers with limited resources, both financially and in personnel, may outsource some or all of their compliance obligations to third-party consulting firms. Over the last three years in particular, the use of third parties to provide complian Read More »

Best Practices for Private Equity Fund Managers Entering Into Joint Ventures With Investors (Part One of Three)

As large institutional investors have become more practiced, they’ve designated specialized investment teams to evaluate investment opportunities and oversee allocation of assets. As a result of their seasoning, investors are better-situated to assume a more active role in deploying significant assets, even beyond their own. More active proprietary investing does not, however, signify that large institutional investors have the expertise required to manage portfolio companies or have access t Read More »

SEC Enforcement Actions Highlight Personal Liability Risk for Hedge Fund Executives

On August 15, 2017, the Securities and Exchange Commission settled a pair of related enforcement actions in a case that had been ongoing since March 2015, involving two now-defunct affiliated investment advisers’ Form ADV misstatements and failures to keep separate books and records. The SEC held the registrants’ in-house chief operating officer and outsourced chief compliance officer responsible for the violations, and their cases remind hedge fund managers that the Office of Compliance Ins Read More »

Latest OCIE Alert Warns Advisers of Common Weaknesses in Oversight of Performance Advertising

Advertising a fund’s performance is a key aspect of soliciting new investors. Among the myriad considerations investors take into account when determining whether to invest with a hedge fund, performance is routinely cited as one of the most unambiguous key factors influencing both the initial decision to invest and the decision to remain in a hedge fund. Performance reporting, however—a potential minefield of regulatory nuances that can flummox even the most thorough of hedge fund complianc Read More »

Stroock Snags Private Funds Partner Eric Requenez

Eric Requenez has joined Stroock’s private funds group as a partner in the New York office. Requenez’s practice focuses on the structuring and distribution of investment funds, proprietary products and securities offerings, as well as advising funds on transactions and regulatory and compliance matters. His clients include sponsors, investment banks, financial advisers and fund managers, including private equity funds, hedge funds, hybrid funds, fund-of-funds, real estate funds, energy and i Read More »