Private Equity Fund Formation: Choice of Entity, SEC Regulatory Issues, Tax Concerns
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Banking and Finance
- event Date
Tuesday, February 27, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will examine the critical steps in the formation and operation of a private equity fund and identify the most significant private equity fund formation trends from a capital raising, SEC regulatory, and tax standpoint.
Mr. Fulton’s practice focuses on the organization and operation of private investment funds, including buyout, growth, social impact, conduit, and hedge funds. He also represents private fund sponsors in joint venture and co-investment arrangements and limited partners in their investments in private funds.
Mr. Goldman advises clients on federal income tax matters related to a variety of transactions, including U.S. and cross-border mergers, acquisitions, joint ventures, financings, partnership investments, restructurings and spinoffs. He also regularly advises private equity sponsors and other private fund managers on tax matters relating to the formation and operation of private investment funds, as well as secondary transactions. Mr. Goldman has also represented clients in connection with tax controversy matters before the Internal Revenue Service and the U.S. Tax Court.
Ms. Jin has 20 years of experience delivering high-quality and business-focused legal solutions to private fund sponsors and asset managers of all sizes and strategies. She has formed, structured, re-structured, and advised numerous private funds. Her work encompasses a variety of matters, including fund formation, regulatory compliance, exit strategies, private and public securities offerings, forming a SPAC, and guiding portfolio companies for their initial public offerings. In addition, Ms. Jin has extensive experience advising businesses through all stages of growth from start-up and capital raising right through to initial public offering and their ongoing securities law compliance and periodic reporting.
Private fund formation in the U.S. begins with a choice of entity (typically a limited partnership) and a decision about where to form the fund (usually Delaware or the Cayman Islands, but increasingly Luxembourg and other jurisdictions). Counsel's work representing a fund begins with a thorough understanding of the commercial objectives of the sponsor and the limited partners, the fundamental rights and obligations of the general and limited partners, and how to tailor the agreements between the parties.
Fund formation also requires an understanding of the regulatory landscape. The SEC has the authority to regulate investment advisers under the Advisers Act and generally requires advisers to register with the SEC unless they meet specific exemptions. Investment advisers may also be subject to regulatory requirements at the state level. The SEC continues to scrutinize fees and expenses, co-investments, conflicts of interest, cybersecurity, and other issues with investment funds.
Tax matters play a critical role in both fund formation and the structure of underlying fund investments. Sponsors of private equity funds may choose to limit participation by certain types of investors due to applicable legal and regulatory considerations and the fund's investment strategy.
Listen as our panel of private equity attorneys discusses the changing landscape of private equity fund formation, including new regulations and their implications for fund sponsors.
- Overview of the current private equity fund formation landscape
- Why a limited partnership? Why Delaware? Key concepts under the DRULPA
- Regulatory concerns
- Investment Advisers Act
- SEC focus on fees and expenses and conflicts of interest
- Co-investments
- Cybersecurity
- Current tax issues for private equity funds
- Initial fundraising negotiations
- Fund terms update and hot topics
The panel will review these and other key issues:
- What are the most significant changes impacting private equity fund formation from a capital raising perspective?
- What are some recent structural changes taking place in the market?
- How are new SEC initiatives and guidance impacting private equity fund terms?
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