Fund Formation
SADIS
ABOUT SADIS
Sadis&GoldbergLLPisaninternationallyrecognizedlaw firm.Drawingontheexperienceanddepthof ourlawyersinthesedistinctareas,weleverageeach lawyer’sindustry-specificknowledgetohelpourclients succeed.Thiscollaborativeapproachbringscollective insighttothetablethatcontributestosensible,efficient resolutions,andallowingustoremainattentivetothecost andtimesensitivitiesthatmaybeinvolved.Sadisclients includedomesticandinternationalentities,financial institutions,familyoffices,venturecapitalfunds,hedge funds,privateequityfunds,buyoutfunds,commodity pools,specialpurposevehiclesandnumerousbusiness operatinginvariousindustriesaroundtheworld.
INDUSTRY INVOLVEMENT
SadisAnnualPrivateFundsForum–Industryleaders fromlawfirms,accountingfirms,thirdpartyadministrators, directorsandconsultantsfocusedontheprivatefund industrygathertogetherforseveraldays fromacrossthe globetoshareideasanddiscussrecentdevelopments facingthefinancialservicesindustry.
SadisBusinessBreakfast–Bringstogetherinvestors, founders,accountants,analysts,capitalproviders,and otherbusinessleaderstodiscusstrendingtopicsand network.
IndependentSponsors–Sadishostsnetworkingevents forcapitalprovidersandindependentsponsors.
Sadis Family Office Lunches – Executives from family offices networking and sharing ideas on market trends acrossvariousindustries.
FOCUSED SOPHISTICATED REPRESENTATION
Sadis maintains a diverse, business-oriented practice focused on private investment funds, asset and wealth managers, family offices, litigation, corporate, mergers & acquisitions, real estate, regulatory and compliance, tax and ERISA.
“No law firm is better in the hedge fund space. Sadis doesn’t just know the legal framework; they are on the cutting edge of defining it.”
– JOHN STERLING FOUNDER, STERLING FUND MANAGERS
HEDGEFUNDS
The Financial Services Group at Sadis provides legal advice to both domestic and offshore private investment funds in the alternative investment space. We provide counsel on the structure and formation of new funds, as well as the reorganization and restructuringofexistingfunds.Westructureand service a wide variety of funds, such as early stage and/or angel investments, private credit, long/short equity funds, global macro funds, emerging market funds, risk arbitrage funds, convertible arbitrage funds, high yield bond funds, distressed debt funds, bank debt funds, sector-specific funds (e.g. technology, Internet, health care, biotechnology), collectible funds (e.g. car, art, watch), crypto-currency funds, cannabis funds, fundoffunds,multi-managerfundsandfundplatforms. We provide customized drafting of confidential private placementmemoranda,limitedpartnershipagreements, operating agreements, subscription documents andotherrelatedfunddocuments.
We also draft and negotiate agreements documenting the relationship with fund managers, principals and employees, subadvisors, consultants and fund counterparties. Sadis currently represents several hundred private investment funds and their managers throughout the world. Our client base is comprised of clientsof all sizes, backgrounds and investment sectors and our client base represents a significant percentage of the private fund industry’s market share, providing the Firm with an unusual awareness of current market behaviors,favoredcommercialtermsandotherindustry trends. This unique access to current market information allows our team to advise our clients with both experienced legal counsel and timely business intelligence. By virtue of representing several hundred alternative investment vehicles with investment managersdomiciledthroughouttheworld,ourmarket
share gives us a unique perspective on the global investmentfundsindustry.
Additionally, as a result of our unique global footprint, we enjoy very strong relationships with leading legal counsel and other professionals in international centers for onshore and offshore finance, such as the Cayman Islands, Bermuda, the British Virgin Islands, Luxembourg, Ireland, Switzerland, Malta, Jersey, Guernsey, Mauritius, Hong Kong and the United Kingdom. In addition, we maintain a specialized cross-border funds practice targeting non-US managers seeking to offer securities and launch products in the United States, including clients in Ireland, the UK, the Netherlands, Canada, China, Singapore, France,Luxembourg,GermanyandSwitzerland.
Our
clientbaserepresents asignificantpercentageofthe privatefundindustry’smarket share,providingtheFirmwith anunusualawarenessof current marketbehaviors,favored commercialtermsandother industrytrends.
REGULATORY & COMPLIANCE
OUR REGULATORY AND COMPLIANCE TEAM ADVISES FUNDS AND THEIR MANAGERS ON ALL OF U.S. REGULATORY ASPECTS OF THEIR BUSINESS INCLUDING THE FOLLOWING:
• SecuritiesandExchangeActof1934.Weadviseclientsonbroker-dealerlawsapplicabletotheirsellingactivities andregularlynegotiateprivateplacementanddistributionagentswithsellingagents.Ourregulatoryadvice coversallaspectsofbroker-dealerlaws,includingFINRArulesandregulationsandlicensing.
• SecuritiesActof1933.Weprovideareviewofthebasisfortheprivateofferingtotheinvestorandthatthefund fileaFormDwiththeSECtoavailitselfoftheprivatesecuritiesofferingsafeharborunderRule506(b)orRule 506(c)(noteRule506(c)offerings,whichpermitpublicmarketing,requireadditionalduediligencebythe managerandsoadditionalworkonthesubscriptiondocuments).
• InvestmentAdvisersActof1940.Togetherwithfundmanagementwereviewapplicableexemptionsthatmay beavailabletoitundertheAdvisersAct,includingtheforeignprivateadvisersexemption,venturecapital exemptionandprivatefundadvisersexemption.Inaddition,wehandleallregulatoryfilingswiththeSEC, includingany“exemptreportingadviser”filingsandfullregistrationswiththeSEC,includingthedraftingof CodesofEthicsandComplianceManuals.
• InvestmentCompanyActof1940.IntheeventanyfeederfundsareformedinordertoconductaU.S.offering, wewouldadviseontheregulatoryexemptionsavailabletothefundundertheInvestmentCompanyAct, includingthe3(c)(1),3(c)(5)and3(c)(7)exemptions,aswellasinvestorduediligenceobligationsimposedonthe managertodemonstratecompliance.
• CommodityExchangeActRegulation.Inaddition,weassessanyfilingobligationsundertheCommodity ExchangeAct(applicabletocommodities,currenciesandswaps),includinganycommoditypooloperator (CPO)andcommoditytradingadviser(CTA)filings.Abroadexemptionfromregistrationexistsforlowlevelsof activitiesintheseinstruments,andstandardexemptionsexistforofferingsinprivatefunds.Theexpense associatedwithmakingtherelevantfilingswouldbeminimalforthebroadexemption,andrelativelylow forthestandardprivatefundexemptions,thoughpreviouslyunregisteredCPOsandCTAswouldneedto completenewregistrationswiththeNationalFuturesAssociation.
• EmployeeRetirementIncomeSecurityAct(ERISA).Foroffersofsecuritiestopensionplansorotherinvestors whoseassetsconstituteplanassetsunderU.S.law,wewouldadviseontheobligationsimposedunderERISA andtheguidelineswhichthefundshouldfollowinrespectofERISAinvestorstoensurethatthefunddoesnot becomeafiduciaryofanyERISAplaninvestor.
• MockAudits.WeregularlyconductSEC&FINRAmockauditsandfocusedcompliancereviewsonbehalfofour clients.Thesereviewsandauditsencompassareviewofcompliancepoliciesandproceduresthatarerequired tobemaintainedbyaclientunderfederalandstatesecuritieslaws.Ourteamleveragesitsmultidisciplinary expertisetoprovideinsightintobestpracticesfromacompliance,enforcementandbusinessperspective.
FUND STRUCTURING + COSTS
Whilethereareseveralpossiblestructurestoconsider,forpurposesofthisproposal,wewillfocusontwoprimarystructures whichfocusonthedomicileofaholdingcompanythroughwhicheachinvestmentismadebywhollyownedsubsidiaries. Based onourinitialconversation,weunderstandthat:(i)theinvestmentstrategyofthefund(s)istomakeinvestmentsinaccounting firmsandexitviaaninitialpublicoffering;(ii)investorswillinclude(a)U.S.taxableandnon-U.S.investors(India,UAE,etc.),and(b) mayincludeU.S.tax-exemptinvestors;and(iii)eitheranIndianorU.S.domiciledcorporateentitymayserveastheholding companyofeachofthewhollyownedunderlyingsubsidiaries.
Worthnoting,ifanIndiandomiciledholdingcompanyisutilized,thestructuringoftheIndianholdingcompany’sinterestsneed tobereviewedastolimitationsinconnectionwiththeownershipofU.S.operatingaccountingfirms,amongotherissues. Upon ourengagement,wewillreviewandfinalizethestructurewithyouandIndianlegalcounselanddiscussthebenefitsand limitationstoeachstructureweconsider.
UnitedStatesHoldingCompany.
Non-USFund. Non-USinvestorswillinvestthroughaCaymanIslandsLimitedPartnership(the“Non-USFund”). TheNon-US FundwillinvestintheU.S.Fund(definedbelow). TheNon-USFundwouldeliminatetheneedforthenon-USinvestorstobe includedaspartnersontheUSpartnershiptaxreturnoftheU.S.Fund.
USFund.U.S.taxableinvestorswillinvestthroughaDelawarelimitedpartnership(“U.S.Fund”)thatwillinvestinaU.S.domiciled corporateentitywhichwillownU.S.domiciledsubsidiaryentitiesthroughwhicheachtransactionwillbeconsummated.
IndianHoldingCompany.
Non-USFund. Non-USinvestorswillinvestthroughaCaymanIslandsLimitedPartnership(the“Non-USFund”). TheNon-US FundwillinvestinanIndiandomiciledcorporateentity(“IndiaHoldCo”)throughwhichwhollyownedsubsidiarieswillbe organizedthroughwhicheachtransactionwillbeconsumated.
CaymanFundforU.S.TaxableInvestors.U.S.taxableinvestorswillinvestthroughaCaymanlimitedpartnership(“U.S.Investor Fund”)thatwillinvestinIndianHoldCo.
BillingRates
Ourbillingratesrangefrom$400-$1,250.Thelawyerswhoweanticipatethatwillworkonthismatterwillrangebetween$500$1,150/hour.Basedonourcompetitors’rates,weareonaverageatleast20%-50%lessinbillingratesthanourpeers. Weexpect thatthecostforthescopeofworkbilledatourhourlyrateswouldbeapproximately$120,000-$160,000.IfSadisisusedin connectionwiththeacquisitionoftheportfoliocompanies,acreditof15%offeesbilledinconnectionwiththelaunchofthe fundswillbeappliedtowardslegalfeesinconnectionwiththeacquisitionoftheportfoliocompanies.
Timing
Inconnectionwithdraftingtheofferingdocuments,regardlessofthestructureweutilize,weexpecttocompletethefunds offeringdocumentswithin10-12weeks.
Our Team
OUR TEAM
Ron S. Geffner PARTNER
212.573.6660
rgeffner@sadis.com
Ron S. Geffner is a founding member of the firm’s Executive Committee and also oversees the Financial Services group. He regularly structures, organizes and counsels private investment vehicles, investment advisory organizations, broker-dealers, commodity pool operators and other investment fiduciaries. Ron also routinely counsels clients in connection with regulatory investigations and actions. His broad background with federal and state securities laws, and the rules, regulations and customary practices of the SEC, Financial Industry Regulatory Authority, Commodities Futures Trading Commission and various other regulatory bodies, enables him to provide strategic guidance to a diverse clientele. He provides legal services to hundreds of hedge funds, private equity funds and venture capital funds organized in the United States and offshore.
Ron regularly structures, organizes and counsels private investment vehicles, investment advisory organizations, brokerdealers, commodity pool operators and other investment fiduciaries.
Prior to starting Sadis & Goldberg, Ron was associated with two other New York City-based law firms, where he represented domestic and offshore private investment vehicles, as well as broker-dealers, registered investment advisers and registered investment companies.
OUR TEAM
Jonathan
Bernstein
PARTNER
212.573.8030
jbernstein@sadis.com
Jonathan Bernstein is a partner in the Financial Services and Corporate groups. Jonathan focuses his practice in matters concerning mergers & acquisitions, corporate law and general corporate counseling. Jonathan serves as a trusted advisor to private equity sponsors, family offices and middlemarket and family-owned businesses across industries.
Jonathan has experience representing clients across the fashion, apparel, distribution, consumer products, media, manufacturing, healthcare, technology and hospitality industries, among others. He assists our clients in connection with acquisitions, divestures, sales and financing. Our clients benefit from Jonathan’s knowledge of their businesses to execute transactions, along with his extensive experience executing complex transactions. As an outgrowth of the close relationships he develops with our clients, Jonathan routinely works with our clients to craft business strategies which meet their business priorities while managing risk. He also serves as an outside general counsel, advising on the full gamut of day-to-day legal issues.
Jonathan takes a practical approach to deal-making that puts a premium on big-picture issues that matter to his clients.
OUR TEAM
Robert Cromwell PARTNER
212.573.8034
rcromwell@sadis.com
Robert Cromwell practices in the firm’s Financial Services and Corporate groups. Robert’s practice is focused on purchases, sales and recapitalizations of private companies, venture capital start-ups, private equity transactions, registered and unregistered investment companies (ETFs, private equity funds, real estate funds and hedge funds) and representing founders, managers and boards of businesses and investment funds. Robert also advises clients on general corporate matters.
Robert’s transactional experience includes: corporate and LLC startups, restructurings and exits; registered and private securities offerings; hedge funds, mutual funds, private equity funds, collective trust funds; preparation of corporate and partnership governing documents, registration statements and periodic financial reports; equity incentive plans, employment agreements, loan agreements; counseling boards of directors of registered and private funds and retirement plan committees.
Robert’s practice is focused on purchases, sales and recapitalizations of private companies, venture capital start-ups, private equity transactions, registered and unregistered investment companies.
OUR TEAM
Paul D. Fasciano PARTNER
212.573.8025
pfasciano@sadis.com
Paul D. Fasciano is a partner in the firm’s Financial Services and Corporate groups. Paul began his career as a general corporate attorney, and now focuses his practice on representing private fund managers, both in the formation phase and also in ongoing corporate and transactional matters, including mergers and acquisitions, activist investor representation, securities law compliance and derivatives.
Paul regularly counsels clients on structuring and forming U.S. and non-U.S. private investment funds, including hedge funds, private equity funds and custom “hybrid” funds incorporating features of both. Funds advised by Paul cover a wide variety of strategies and asset classes, with varying liquidity characteristics, including more typical asset classes such as publicly traded equities, as well as less typical asset classes such as loans, consumer receivables and renewable energy credits. Paul also has extensive experience in drafting and negotiating agreements memorializing the relationship between the principals of a fund.
Paul has advised participants in a variety of public and private merger and acquisition transactions in diverse industries and has brought this practice to focus on transactions involving investment advisers, broker-dealers and other players in the financial services industry.
OUR TEAM
David Fitzgerald PARTNER
212.573.8428
dfitzgerald@sadis.com
David Fitzgerald’s practice focuses on investment funds, securities, joint ventures, regulatory compliance and investment advisers. He regularly structures and organizes hedge funds, private equity funds, funds of funds, separately managed accounts and hybrid funds. Additionally, he advises private fund managers on structure, compensation, employment and investor issues, and other matters relating to management companies.
Drawing on his 16 years of experience as an institutional Chief Compliance Officer and General Counsel, David provides ongoing advice to investment advisers on securities law issues, including SEC filings. His practice also involves counseling clients in SEC regulatory matters, including compliance issues related to registered advisers.
David is a Partner in the Firm’s Financial Services and Corporate Groups
OUR TEAM
Seth Lebowitz PARTNER
212.573.8152
slebowitz@sadis.com
Seth Lebowitz is a partner in the firm’s Tax group. Seth advises clients on the tax-efficient planning and execution of a broad range of transactions, with a particular focus on the formation, operation and investing activities of private equity and hedge funds. Seth has experience with:
• Domestic and international tax issues relating to fund structuring
• Joint ventures and partnerships
• Corporate and real estate investing
• Lending
• Securities trading
• Distressed investing
• Financial products.
Seth advises clients on the tax-efficient planning and execution of a broad range of transactions, with a particular focus on the formation, operation and investing activities of private equity and hedge funds.
OUR TEAM
Paul Marino PARTNER
212.573.8158
pmarino@sadis.com
Paul Marino is the head of the Corporate and Mergers & Acquisitions group, and co chair of the Financial Services group. Paul focuses his practice in matters concerning financial services, corporate law and corporate finance. Paul provides counsel in the areas of private equity funds and mergers and acquisitions for private equity firms and public and private companies and private equity fund and hedge fund formation.
Paul works on a variety of M&A transactions, including leveraged acquisitions, divestitures of business divisions, going-private transactions, and other strategic acquisitions and dispositions, in the following industries: manufacturing, telecommunications, consumer products, hospitality, healthcare, and technology, among others. His practice also includes joint ventures and general company representation matters.
Paul has represented national and multinational corporations, ranging from telecoms to tech companies, as well as real estate syndication and financial investors and investment advisors. He has also negotiated and structured a number of U.S. domestic and cross-border mergers and acquisitions and joint ventures.
Paul provides counsel in the areas of private equity funds and mergers and acquisitions for private equity firms and public and private companies and private equity fund and hedge fund formation.
OUR TEAM
Yelena Maltser PARTNER
212.573.8429
ymaltser@sadis.com
Yelena Maltser practices in the firm’s Financial Services and Corporate groups. Yelena regularly counsels clients on structuring and forming U.S. and non-U.S. private investment vehicles (including, without limitation, hedge funds, private equity funds, hybrid funds, funds with non-traditional asset classes, real estate funds, venture capital funds, funds-offunds, commodity pools, as well as managed accounts). Yelena also advises clients on structuring the management entities to such funds. She regularly prepares offering and organizational documents for investment funds; negotiates side letter agreements, seed capital agreements, joint venture agreements and compensation arrangements; reviews marketing materials; and provides ongoing advice to existing investment vehicles and management entities. In addition, Yelena counsels investment managers on registration and ongoing regulatory compliance issues.
Prior to joining Sadis & Goldberg, Yelena was associated with two other New York City-based law firms, where she was involved in general corporate work.
Yelena counsels investment managers on registration and ongoing regulatory compliance issues.
OUR TEAM
Vartika Naithani
ASSOCIATE
212.573.8148
vnaithani@sadis.com
VartikaNaithaniisanAssociateinthefirm’sFinancialServices,Corporate,andRegulatory Compliancegroups.Vartikaconcentratesherpracticeonfundformation,regulatory compliances,andgeneralcorporatematters.Vartikaisaforeigntrainedattorneyandhasan LL.M.degreeinBanking,Corporate,andFinanceLawfromFordhamUniversitySchoolofLaw.
Vartikahasmorethan7yearsofworkexperienceinIndiaasin-houselegalcounselwith organizationssuchasBupa,Allianz,andAssurant. Shehasworkedonawidevarietyof insuranceandgeneralcorporatematters.PriortojoiningSadis,VartikainternedwiththeNew JerseyBureauofSecurities,whereinsheassistedtheregulatorswithsecuritiesregistration, investigations,andexaminations.
SamanthaRomanoisanAssociateinthefirm’sFinancialServicesgroup.Samanthaconcentrates herpracticeonprivatefundformationandgeneralcorporatematters.
Beforeattendinglawschool,SamanthawasinWashington,DCworkingasaparalegalina structuredfinancegroup.
OUR TEAM
Mark Strefling PARTNER
212.573.8519
mstrefling@sadis.com
Mark Strefling is recognized as an industry-leading investment management lawyer with over two decades of experience in the alternative investment industry.
Mark’s practice includes the specialized representation of private fund managers in the design and formation of complex and innovative fund structures, the marketing and distribution of fund interests, the design of comprehensive compliance programs, and the representation of managers during critical regulatory examinations and investigations. Mark also partners with managers to deliver compliance training and education, mock examinations, regulatory and compliance gap analysis, and critical CCO regulatory support.
Mark represents private fund managers, investment advisers, and other members of the investment management industry on fund structures, and compliance matters.
OUR TEAM
Erika L. Winkler PARTNER
212.573.8022
ewinkler@sadis.com
Erika L. Winkler is a partner in the firm’s Financial Services and Corporate groups. Erika’s practice focuses on the structuring and formation, capital raising and regulatory compliance of U.S. and non-U.S. private investment vehicles, including, without limitation, hedge funds, private equity funds, hybrid funds, funds with non-traditional asset classes, real estate funds, venture capital funds, special purpose vehicles, funds-of-funds, commodity pools, as well as managed accounts. She also regularly advises management companies and fund managers on a wide array of matters, including compensation structures, restructurings and reorganizations, joint ventures, side letters and seed capital transactions, and employment and investor issues, and negotiates and prepares related agreements and documentation.
Erika’s practice focuses on the structuring and formation, capital raising and regulatory compliance of U.S. and non-U.S. private investment vehicles.
OUR TEAM
Alex Gelinas COUNSEL
212.947.3793
agelinas@sadis.com
Alex Gelinas is a Senior Counsel in the firm’s tax group. Alex focuses his practice on providing tax advice to investment managers of hedge funds, private equity funds and other investment funds on all aspects of their businesses, including management entity and fund formation, partnership taxation issues, compensation arrangements and ongoing investment activities and transactions. Alex also provides tax advice to U.S. pension funds, sovereign wealth funds and other U.S. and foreign institutional investors in connection with their investments in private equity funds, hedge funds and U.S. joint ventures. He also has extensive experience in providing tax planning advice to high-net-worth individuals and families.
Alex has extensive experience with respect to the “plan assets” and other ERISA regulatory issues applicable to sponsors of, and institutional investors in, onshore and offshore hedge funds, private equity funds and other pooled investment vehicles.
OUR TEAM
Jaywon Choi ASSOCIATE
212.573.8424 jchoi@sadis.com
JaywonChoiisanassociateinSadis’FinancialServicesandCorporategroups,focusingonfund formation,corporatetransactions,andregulatorycomplianceforinvestmentfunds.
JaywonisfluentinKorean.
OUR TEAM
Donald Penn ASSOCIATE
32.330.2362
dpenn@sadis.com
DonaldPennisanAssociateinthefirm’sFinancialServicesgroup.Donaldconcentrateshis practiceonthestructuringandformation,capitalraisingandregulatorycomplianceofU.S.and non-U.S.privateinvestmentvehicles,including,withoutlimitation,hedgefunds,privateequity funds,hybridfunds,fundswithnon-traditionalassetclasses,realestatefunds,venturecapital funds,specialpurposevehicles,funds-of-funds,commoditypools,aswellasmanagedaccounts. PriortojoiningSadis,DonaldwasanassociateataNewYorkcitybasedlawfirm.
OUR TEAM
Jacob Shiffer ASSOCIATE
212.573.8027
shiffer@sadis.com
JacobShifferisanassociateinthefirm’sFinancialServicesandCorporategroups.Jacob concentrateshispracticesonprivatefundformation,mergersandacquisitions,andgeneral corporatematters.
PriortojoiningSadis,JacobservedintheUnitedStatesAirForceforeightyears,wherehe workedasanAnalyst.