The Fund Formation Practice Group focuses on advising investment managers on the formation and ongoing operations of domestic and offshore private investment funds (including real estate, private equity, venture and hedge) and their management entities.
Practice Group Leader: Terri L. Adler
The Fund Formation Practice Group advises investment managers on the formation and ongoing operations of domestic and offshore private real estate investment funds and their management entities. Additionally, we have a niche focus on bespoke, creative funds in niche or unique areas, including, by way of example, sponsor capital funds and GP capital funds. Our skill set is especially useful in situations in which there is a platform being developed by the partner in conjunction with the fund formation.
Private Real Estate Investment Funds
Our practice focuses on private funds investing in real estate, including debt, equity, blind pools, single-asset vehicles and funds of real estate funds, across all strategies and asset classes. We represent emerging managers, institutional managers and specialized funds such as GP capital and sponsor capital funds. We have participated in structuring, forming and performing diligence for these funds.
In addition to structuring and forming funds, we form investment management entities and platforms, including those managed by multiple parties and other types of strategic relationships.
The group also advises private fund investors with respect to their investments in private funds or managed accounts, performing due diligence and negotiating side letters, seed and incubation deals and other strategic relationships.
We also assist clients who are active in the so-called “secondaries” market – purchasing and selling private fund interests as well as more complex fund recapitalizations and other restructurings.
Sponsor Capital Funds, GP Capital Funds and Other Bespoke Investment Structures
As noted above, a subset of our fund formation practice is our bespoke fund practice. We focus heavily in this area for the important reason that there is no well-defined “market” as to fees, structure, waterfalls or other provisions pertaining to these funds. The reason is that there are simply not enough of them in existence for there to be pre-agreed provisions on these critical business and legal issues. This is contra to the world of so-called institutional capital funds where the deep investor knowledge of hundreds – and even thousands – of similar funds requires them to look the same (or at least very similar). These bespoke funds are not so chained and therefore permit us to mix creativity with our expertise. This results in us providing great value to our clients, on both the legal and the business issues.
Indeed, this is our sweet spot in the fund formation arena!
In respect of these Bespoke Funds we provide strategic, economic and legal advice to:
Developers, investors and similar parties raising sponsor capital funds for their own use;
Investors desiring to provide gap equity to real estate developers, investors and similar parties who have a need for such capital; and
Investors making minority or more significant investments in these funds.
Finally, it bears mention that our fund formation practice mixes well with our mission to “help our clients grow their businesses”. This includes the following for our Fund Formation clients:
Connecting our clients with useful investment and strategic relationships
Utilizing our extensive market knowledge to help clients structure offerings that will be marketable to outside investors
Connecting our clients with the right service providers (administrators, auditors, placement agents, sources of financing, and other counterparties)
Providing marketing advice and assisting clients in developing institutional-grade marketing materials and offering documents that are straightforward and easy for investors to understand
Using our top-notch tax practice to determine the ideal tax-efficient structure for domestic and offshore funds and management entities