Fund Formation
SADIS & GOLDBERG LLP
Preparedfor:LucaSchnettlerandAngelFung
60-80
Onaverage,Private Fundscreatedand launchedannually
ABOUT SADIS
Sadis&GoldbergLLPisaglobally recognizedlawfirm. Drawingontheexperienceanddepthofourteam,weleverage eachlawyer’sindustry-specificknowledgetohelpourclients succeed.Thiscollaborativeapproachbringscollectiveinsight tothetablethatcontributestosensible,efficientresolutions, andallowsustoremainattentivetocostandtimesensitivities.
21 Countrieswith representedclients
#3
PreqinRankedforLaw FirmsServicingHedge Funds in theU.S.
#7
PreqinRankedforLaw FirmsServicingHedge FundsWorldwide
Sadisclientsincludefinancialinstitutions,familyoffices, venturecapitalfunds,hedgefunds,privateequityfunds, buyoutfunds,commoditypools,specialpurposevehicles, strategicandfinancialbuyers,independentsponsors,domestic andinternationalcompanies,andnumerousothertypesof businessesoperatinginvariousindustriesaroundtheworld.
INDUSTRY INVOLVEMENT
IndependentSponsors –Sadishostsnetworkingeventsto connectcapitalprovidersandindependentsponsors,including twomajorconferenceseachyear
EarnoutMagazine–Sadispublishesaquarterlymagazine, targetingfinancialservicesprofessionals,withafocuson independentsponsorsanddealmakers.
Sadis Business Breakfast – Sadis brings together investors, founders, analysts, capital providers, service providers and other businessleaderstodiscusstrendingtopicsandtonetwork.
Sadis Family Office Dinners – Sadishostsexecutives from family officestonetwork and share ideas on markettrends.
SadisAnnualPrivateFundsForum –Industryleadersfromlaw firms,accountingfirms,third-partyadministrators,directorsand consultantsfocusedontheprivatefundsindustrygather togetherforseveraldaysfromacrosstheglobetoshareideas anddiscussrecentdevelopmentsfacingthefinancialservices industry.
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
INVESTMENT FUNDS
The Investment Funds practice has represented private funds clients for almost 30 years, playing aprominent role in the development of the private funds industry and earning usaunique leadership role in th Working closely with lawyers in the Firm’s other practice areas, our team provides comprehensive advice to many of the world’s best-known institutionalalternative assetmanagers, aswellassmallerfirst-timefundmanagersandindependent boutiques.
Our clients include the full spectrum of investment funds, such as private equity, hedge, real estate, venture capital, registered mutual funds (both open-end and closed-end) and UCITS funds, sponsored by some of the highest-profile global fund managers. We work extensively either with or opposite each major category of private fund investors, including corporate, public and private pension plans, families, foundations and endowments, funds-of-funds, sovereign wealthfundsandquasi-governmentalorganizationinvestors.
HEDGE FUNDS
The Financial Services Group at Sadis provides legal advice to both domestic and offshore private investment funds in the alternative investment space. Weprovidecounselonthestructureandformationof new funds, as well as the reorganization and restructuring of existing funds. We structure and service a wide variety of funds, such as 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), cryptocurrency funds, cannabis funds, fund-of-funds, multimanager funds and fund platforms. We provide customizeddraftingofconfidentialprivate placement memoranda, limited partnership agreements, operating agreements, subscription documents and otherrelatedfunddocuments.
We also draft and negotiate agreements documenting the relationship with fund managers, principals and employees, sub-advisors, consultants and other counterparties. Sadis currently represents hundreds of private investment funds with managers throughout the world. Our clients include managers and funds of 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, favored commercial terms and other industry trends. This unique access to current market information allows our team to provide our clients with both experienced legal counsel and timely business intelligence. By virtue of representing several hundred alternative investment vehicleswithinvestmentmanagersdomiciled
throughout the world, our market share gives us a unique perspective on the global investment fundsindustry.
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-U.S. managers seeking to offer securities and launch products in the United States, including clients in Ireland, the UK, theNetherlands,Canada,China,Singapore, France, Luxembourg,GermanyandSwitzerland.
Ourclientbaserepresents asignificantpercentageofthe privatefundindustry’smarket share,providingtheFirmwith anunusualawarenessof currentmarketbehaviors, favoredcommercialtermsand otherindustrytrends.
FUND STRUCTURING AND COSTS
Thelegalservicescontemplatetheformationofamaster-feederstructureconsistingofaDelaware-domiciledprivateopenendedfundtoserveasaU.S.feeder(“U.S.Fund”),aCaymanIslands-domiciledopen-endedfundtoserveasanon-U.S.feeder (“CaymanFund”),andaCaymanIslands-domiciledopen-endedvehicletoserveasthemasterfund("MasterFund", collectively,the“Master-FeederStructure”).Seediagrambelow.
AteamofexperiencedSadisPartnerswillworkwithyouandyourteamtoprovideguidanceinconnectionwithtax,ERISA andregulatorycompliance,inconnectionwiththeMaster-FeederStructure. Webelievethatourteam’sholisticapproach resultsinafarbetterexperienceforourclientsandabetter-qualityworkproduct,whichultimately,reducesyourriskand enhancesyouropportunitytogrow. Also,noteworthy,inrecentyearsPreqinhasrankedSadis#3forLawFirmsServicing HedgeFundsintheU.S.and#7forLawFirmsServicingHedgeFundsWorldwide.
FUND STRUCTURING AND COSTS
Fee
InconnectionwiththeorganizationoftheMaster-FeederStructure,wewillchargeafixedfeeof$80,000(“FixedFee”),plus out-of-pocketexpenses. Out-of-pocketexpensesincludetheformationandqualificationcostsofcorporateentities,bluesky filingfeeschargedbyeachstate,aswellascostsassociatedwithconductingbackgroundcheck(s)aspartofourstandarddue diligenceprotocol.Sadisisnotcompensatedbynoraddsanyfeeorcosttoanythird-partyexpense,andinalmostallcases, youwillpaythethird-partydirectly.
FixedFeeServices
TheservicesincludedintheFixedFeewillbe:(i)(a)structuringtheMaster-FeederStructure,and(b)structuringthefunds’ managemententitiesorreviewingthestructureofexistingmanagemententities,focusingonmitigatingtaxliabilitiesand clarifyingregulatoryobligations;(ii)draftingtheconfidentialprivateplacementmemorandaandsubscriptiondocumentsfor boththeU.S.FundandtheCaymanFund,draftingalimitedpartnershipagreementfortheU.S.Fund,aswellasreviewingthe MemorandumandArticlesofAssociationfortheCaymanFundandtheMasterFund,tobepreparedbyCaymanIslandslegal counsel;(iii)introducingappropriateserviceproviders(uponrequest)andcoordinatingwiththeMaster-FeederStructure’s serviceproviders,includingCaymanIslandslegalcounsel,aswellasthefunds’auditorandadministrator;(iv)draftingbluesky noticefilingsintheU.S.stateswhereinvestorsreside;and(v)providinggenerallegalguidanceinconnectionwiththe foregoingorasmayberequested. Pleasenotethat,throughoutthisprocess,wecoordinatealldraftswiththeclientandwill discuss,totheclient’ssatisfaction,thestructureandtermsoftheofferingdocuments.
Timing
Inconnectionwithdraftingtheforegoingofferingdocuments,weexpecttocompletetheMaster-FeederStructurewithin approximatelyeight(8)weeksfromdateofengagement.
Our Team
Sadis&Goldberg’steamisexceptionally experiencedinventurefundformationand mergersandacquisitions.OurFirm's Partnershavedecadesofexperience,both atSadis&Goldbergandatlarger internationallawfirms,aswellasattheU.S. SecuritiesandExchangeCommission(“SEC").
OUR TEAM
Ron S. Geffner PARTNER
212.573.6660
rgeffner@sadis.com
RonS.GeffnerisafoundingmemberoftheFirm’s ExecutiveCommitteeandalsooverseestheFinancial ServicesGroup.Heregularlystructures,organizesand counselsprivateinvestmentvehicles,investmentadvisory organizations,broker-dealers,commoditypooloperators andotherinvestmentfiduciaries.Ronalsoroutinely counselsclientsinconnectionwithregulatory investigationsandactions.Hisbroadbackgroundwith federalandstatesecuritieslaws,andtherules,regulations andcustomarypracticesoftheSEC,theFinancialIndustry RegulatoryAuthority,theCommoditiesFuturesTrading Commissionandvariousotherregulatorybodies,enables himtoprovidestrategicguidancetoadiverseclientele.He provideslegalservicestohundredsofhedgefunds,private equityfundsandventurecapitalfundsorganizedinthe UnitedStatesandoffshore,aswellasthemanagersof suchfunds.
Ron regularly structures, organizes and counsels private investment vehicles, investment advisory organizations, brokerdealers, commodity pool operators and other investment fiduciaries.
PriortostartingSadis&Goldberg,Ronwasassociatedwith twootherNewYorkCity-basedlawfirms,wherehe representeddomesticandoffshoreprivateinvestment vehicles,aswellasbroker-dealers,registeredinvestment advisersandregisteredinvestmentcompanies.
OUR TEAM
Mark Strefling PARTNER
212.573.8519
mstrefling@sadis.com
MarkStreflingisaPartnerintheFirm'sFinancialServices Group.Markisrecognizedasanindustry-leadinginvestment managementlawyerwithovertwodecadesofexperiencein thealternativeinvestmentsindustry.
Mark’spracticeincludesthespecializedrepresentationof privatefundmanagersinthedesignandformationof complexandinnovativefundstructures,themarketingand distributionoffundinterests,thedesignofcomprehensive complianceprograms,andtherepresentationofmanagers duringcriticalregulatoryexaminationsandinvestigations. Markalsopartnerswithmanagerstodelivercompliance trainingandeducation,mockexaminations,regulatoryand compliancegapanalysis,andcriticalCCOregulatory support.
Mark represents private fund managers, investment advisers, and other members of the investment management industry on fund structures, and compliance matters.
OUR TEAM
Yehuda M. Braunstein
PARTNER
212.947.3796
ybraunstein@sadis.com
YehudaM.BraunsteinheadsuptheFamilyOfficePractice andisalsoamemberofthefirm’sFinancialServicesand CorporateGroups. Yehudacounselsfamilyofficeclientsin connectionwithallaspectsoftheiroperations,including formationissues,governanceandcompensationissues, transactionalanddaytodaymattersaswellascompliance issues.
Yehuda’spracticealsofocusesoninvestmentfunds, securities,jointventures,regulatorycomplianceand investmentadvisers. Heregularlystructuresandorganizes hedgefunds,privateequityfunds(includingrealestate, distressedandlendingfunds),funds-of-funds,separately managedaccountsandhybridfunds. Additionally,headvises privatefundmanagersonstructure,compensation, employmentandinvestorissues,andothermattersrelating tomanagementcompanies.Yehudaalsostructuresand negotiatesseedinvestmentsandoperatingagreements.He providesongoingadvicetoinvestmentadvisersonsecurities lawissues,includingSECfilings. Hispracticealsoinvolves counselingclientsinSECregulatorymatters,including complianceissuesrelatedtoregisteredadvisers, aswellas conductingmockaudits.
Yehudaregularly structuresand organizeshedge funds,privateequity funds(includingreal estate,distressed andlendingfunds), funds-of-funds, separatelymanaged accountsandhybrid funds.
OUR TEAM
Paul D. Fasciano PARTNER
212.573.8025
pfasciano@sadis.com
PaulD.FascianoisaPartnerintheFirm’sFinancialServices andCorporateGroups.Paulbeganhiscareerasageneral corporateattorney,andnowfocuseshispracticeon representingprivatefundmanagers,bothintheformation phaseandalsoinvariousongoingcorporateand transactionalmatters,includingmergersandacquisitions, activistinvestorrepresentation,securitieslawcompliance andderivatives.
Paulregularlycounselsclientsonstructuringandforming U.S.andnon-U.S.privateinvestmentfunds,includinghedge funds,privateequityfundsandcustom“hybrid”funds incorporatingfeaturesofboth.FundsadvisedbyPaulcover awidevarietyofstrategiesandassetclasses,withvarying liquiditycharacteristics,includingmoretypicalassetclasses suchaspubliclytradedequities,aswellaslesstypicalasset classessuchasloans,consumerreceivablesandrenewable energycredits. Paulalsohasextensiveexperiencein draftingandnegotiatingagreementsmemorializingthe relationshipbetweentheprincipalsofafundmanager.
Paulhasadvised participantsina varietyofpublicand privateM&A transactionsin diverseindustries, including transactions involvinginvestment advisers,brokerdealersandother playersinthe financialservices industry.
OUR TEAM
David Fitzgerald PARTNER
212.573.8428
dfitzgerald@sadis.com
DavidFitzgeraldisaPartnerintheFirm'sFinancialServices andCorporateGroups.David'spracticefocuseson investmentfunds,securities,jointventures,regulatory complianceandinvestmentadvisers.Heregularly structuresandorganizeshedgefunds,privateequityfunds, funds-of-funds,separatelymanagedaccountsandhybrid funds. Additionally,headvisesprivatefundmanagerson structure,compensation,employmentandinvestorissues, andothermattersrelatingtomanagementcompanies.
Drawingonhis16yearsofexperienceasaninstitutional ChiefComplianceOfficerandGeneralCounsel,David providesongoingadvicetoinvestmentadviserson securitieslawissues,includingSECfilings. Hispracticealso involvescounselingclientsinSECregulatorymatters, includingcomplianceissuesrelatedtoregisteredadvisers.
David hasprior experienceasan institutional ChiefCompliance Officerand GeneralCounsel.
OUR TEAM
Seth Lebowitz PARTNER
212.573.8152
slebowitz@sadis.com
SethLebowitzisaPartnerintheFirm’sTaxGroup. Sethadvisesclientsonthetax-efficientplanning andexecutionofabroadrangeoftransactions,witha particularfocusontheformation,operationand investingactivitiesofprivateequityfundsandhedge funds.
Specifically,Sethhasexperiencewith:
• 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.
Sethadvisesclients onthetax-efficient planningand executionofabroad rangeoftransactions, withaparticularfocus ontheformation, operationand investingactivities of privateequityfunds andhedgefunds.
OUR TEAM
Alex Gelinas COUNSEL
212.947.3793
agelinas@sadis.com
AlexGelinasisaSeniorCounselintheFirm’sTaxGroup. Alexfocuseshispracticeonprovidingtaxadviceto investmentmanagersofhedgefunds,privateequityfunds andotherinvestmentfundswithrespecttoallaspectsof theirbusinesses,includingmanagemententityandfund formation,partnershiptaxationissues,compensation arrangementsandongoinginvestmentactivitiesand transactions.AlexalsoprovidestaxadvicetoU.S.pension funds,sovereignwealthfundsandotherU.S.andforeign institutionalinvestorsinconnectionwiththeirinvestments inprivateequityfunds,hedgefundsandjointventures.He alsohasextensiveexperienceinprovidingtaxplanning advicetohigh-net-worthindividualsandfamilies.
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
Yelena Maltser PARTNER
212.573.8429
ymaltser@sadis.com
YelenaMaltserisaPartnerintheFirm’sFinancialServices andCorporateGroups.Yelenaregularlycounselsclientson structuringandformingU.S.andnon-U.S.private investmentvehicles(including,withoutlimitation,hedge funds,privateequityfunds,hybridfunds,fundswithnontraditionalassetclasses,realestatefunds,venturecapital funds,funds-of-funds,commoditypools,aswellas managedaccounts). Yelenaalsoadvisesclientson structuringthemanagemententitiesofsuchfunds. She regularlypreparesofferingandorganizationaldocuments forinvestmentfunds;negotiatessideletteragreements, seedcapitalagreements,jointventureagreementsand compensationarrangements;reviewsmarketingmaterials; andprovidesongoingadvicetoexistinginvestmentvehicles andmanagemententities. Inaddition,Yelenacounsels investmentmanagersonregistrationandongoing regulatorycomplianceissues.
PriortojoiningSadis&Goldberg,Yelenawasassociated withtwootherNewYorkCity-basedlawfirms,whereshe wasinvolvedingeneralcorporatework.
Yelenacounsels clientsonstructuring andformingU.S.and non-U.S.private investmentfunds,as wellasthe managemententities ofsuchfunds.
OUR TEAM
Erika L. Winkler PARTNER
212.573.8022
ewinkler@sadis.com
ErikaL.WinklerisaPartnerintheFirm’sFinancialServices andCorporateGroups.Erika’spracticefocusesonthe structuringandformation,capitalraisingandregulatory complianceofU.S.andnon-U.S.privateinvestmentvehicles, including,withoutlimitation,hedgefunds,privateequity funds,hybridfunds,fundswithnon-traditionalassetclasses, realestatefunds,venturecapitalfunds,specialpurpose vehicles,funds-of-funds,commoditypools,aswellas managedaccounts.Shealsoregularlyadvisesmanagement companiesandfundmanagersonawidearrayofmatters, includingcompensationstructures,restructuringsand reorganizations,jointventures,sidelettersandseed capitaltransactions,andemploymentandinvestorissues, andnegotiatesandpreparesrelatedagreementsand 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.
