Private Fund Counsel

Comprehensive Counseling for Private Fund Advisors

When forming their entity, a private fund adviser should consider various factors. These factors could include the amount of money to be managed, whether the company will handle futures or other commodity interests, who the initial investors in the company will be, and the terms of the investment.

MAH Advising, LLC (“MAH”) can provide private fund counsel services such as:

  • Establishing corporations in Delaware, California, and other states
  • Completing SEC, state, and Exempt Reporting Adviser (ERA) registrations 
  • Registering as a Commodity Trading Adviser or Commodity Pool Operator with the NFA
  • Providing advice on seed capital
  • Offering advice on how to handle important contingencies, such as future valuation, put and call provisions, death, disability, withdrawal, or termination of a principal
  • Addressing crucial regulatory compliance issues for the organization’s infrastructure and program of compliance

Fund Structures and Third-Party Service Agreements

If it is structured improperly or if the third-party service agreements have not been carefully managed to negotiate and vetted in regard to the services and responsibilities of the parties, a private fund could implode under the weight of its own expenses. A private fund must also be structured in such a way that the investment strategy and various fund features appeal to the most discerning investors. MAH is qualified to discuss the relevant practical considerations of:

  • Limited Liability Companies (LLCs) and Partnerships (LLCs)
  • Side-by-side funds (onshore and offshore) and master-feeder funds
  • Commodity pools
  • Minimum investment requirements
  • Investment advisory and performance-based fees
  • Unusual situations: side pockets, in-kind redemptions, and special allocations
  • Acceptance of ERISA investors
  • Unrelated business income tax
  • custody, management, audit & tax, and prime brokerage
  • Securities lending agreements and international swaps and derivatives (ISDA)
  • Market data, trading, valuation, and trade analytics
  • Insurance for D&O and E&O
  • Securities and Commodity Regulations
  • The rules governing private funds are complicated. When a private fund adviser violates the complex web of securities and commodity regulations, even unintentionally, investors have strong legal recourse available to them.

We can offer advice on the following subjects:

  • Private funds under sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 
  • Private placements under Regulation D 
  • Activities triggering broker-dealer registration J
  • OBS Act and crowdfunding 
  • Limitations on performance fees 
  • Form PF 
  • Regulation S-ID 
  • NFA registration exemption for de minimis positions 
  • Registration lite 
  • Complete NFA registration as a Commodity Trading Adviser/Commodity Pool Operator 
  • NFA registration of related individuals 
  • Protection of Intellectual Property and Other Employment Contracts

The collective strength of employee efforts and assiduity is a tried-and-true way for the private fund adviser to increase competitive strength. Your customers are the heart of your company, and your investment strategy sets you apart. Private fund advisers frequently neglect to put safety precautions in place to safeguard their intellectual property. Your company could be damaged or even destroyed if no such safeguards exist. It will be beneficial to establish expectations with your staff early on. 

MAH can help by providing tailored:

  • Agreements on confidentiality and intellectual property assignment
  • Procedures for dealing with intellectual property
  • training to increase understanding of confidentiality
  • Compensation packages for portfolio managers and sales representatives
  • Counsel for non-solicitation and non-compete clauses