Private Equity Fund Restructuring: Negotiating Terms, Avoiding Conflicts of Interest and Avoiding Regulatory Scrutiny
Navigating Sponsor Fiduciary Duties, Options for Existing Investors, and Regulatory Requirements

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Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Banking and Finance
- event Date
Wednesday, August 10, 2016
- schedule Time
1:00 PM E.T.
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Live Online
On Demand
This CLE course will discuss the rising trend of restructuring end-of-fund-term and other nonviable private equity funds, developing market practice for fund restructurings, and best practices to negotiate restructuring terms, minimize conflicts of interest and avoid regulatory scrutiny.
Faculty

Mr. Belsley's practice involves structuring, negotiating and documenting complex business transactions, including strategic and leveraged acquisitions, recapitalizations and divestitures, formation and governance of private equity funds (including primary investments in and secondary market sales of private equity fund interests), venture capital investments, mezzanine debt financings, equity financings and corporate governance matters. He regularly represents buyers and sellers, as well as market intermediaries, in their secondary market activities. His secondary market experience includes traditional portfolio sales, structured secondaries, synthetic secondaries, captive fund spin-outs, stapled secondary offerings, fund recapitalizations and restructurings, follow-on funding secondaries and orphaned asset sales in a variety of asset classes, including the venture capital, leveraged buy-out, special situations and real estate sectors. He also frequently represents both private equity fund sponsors and investors in private equity fund formations, fund-level restructurings and governance matters.

Mr. Schlaphoff’s practice focuses on complex regulatory, compliance and structuring matters for sponsors of a wide range of investment vehicles, including both private funds and registered funds. Prior to joining Kirkland, Mr. Schlaphoff was most recently an attorney fellow in the Division of Investment Management at the U.S. Securities and Exchange Commission. At the SEC, Mr. Schlaphoff advised various SEC divisions and offices, including OCIE and Enforcement, on interpretive matters under the Advisers Act, as well as on market practice in the private equity and hedge fund industries. In addition, he contributed to a diverse range of policy and legal matters relating to investment advisers and investment vehicles subject to SEC regulation, including liquid alternative mutual funds, closed-end funds and ETFs.
Description
Private equity fund restructuring transaction volume was $1.2 billion in 2012 and $1.6 billion in 2013. At the end of 2014, restructuring transaction volume shot up to $6.4 billion, fueled partly because funds raised during the boom years have reached the end of their lifespan and some funds are struggling to deliver returns to investors.
These transactions, however, can be challenging to close as negotiations over restructuring terms are very contentious and these deals are likely to involve conflicts of interest. Restructuring these funds on the secondary market is another common vehicle for dealing with these older funds.
How funds should approach these end-of-fund-term situations is a hot topic for the industry, drawing attention from the SEC, which has plans to draw up guidelines to help private equity firms plan for orderly transition.
Listen as our authoritative panel of finance practitioners discusses developing market trends for private equity fund restructurings and best practices to negotiate restructuring terms, minimize conflicts of interest, and avoid regulatory scrutiny.
Outline
- Fund restructuring trends
- Sponsor fiduciary duties and conflicts of interest
- Options for existing investors
- New fund terms
- Distribution waterfalls
- Additional capital
- New investments
- Governance, reporting, voting
- SEC regulatory scrutiny
Benefits
The panel will review these and other key issues:
- What inherent conflicts of interest are present in fund restructuring transactions and what are best practices for minimizing conflicts?
- What are the legal and business considerations for both sponsors and existing investors in a fund restructuring scenario?
- What are key fund terms that must be negotiated in a restructuring deal?
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