Fund Services

Our Services

Sonnenschein’s Fund Services Group specializes in matters that demand extensive experience and a high level of sophistication, and delivers superior service to clients across the alternative investment industry.  We use a multidisciplinary approach, leveraging expertise from all areas of Sonnenschein’s national platform to provide results-oriented counsel with consideration to both the technical details of each issue and its larger implications.  Our clients, in turn, can focus on achieving their core business objectives in an increasingly regulated environment.

Our principal areas of practice involve the representation of hedge funds, funds of funds, commodity pools, investment advisors and asset management firms in connection with fund formation, compliance, operational and transactional matters, political intelligence advisory and advocacy services, and regulatory audits and enforcement proceedings.  Clients include some of the world’s largest and best-known hedge funds, mid-size funds and emerging managers with the potential for swift growth.  Fund strategies include long/short equity, global macro, multi-strategy, country and sector, emerging market, risk arbitrage, activist, multi-manager, distressed debt, PIPEs, hybrid private equity, real estate, futures, fixed income, mortgage-backed, CDO and commodity pools.

In addition to representing hedge funds and their sponsors, we advise institutional and high net worth investors in their alternative investment activities, including in connection with seeding and side letter arrangements.  We also represent service providers to the hedge fund industry, such as fund administrators and placement agents.  Our diverse client base enables us to take a broad view of the industry and to anticipate our clients’ needs accordingly.

Our representations focus on the following key areas:

Fund Formation:

• Master-feeder, side-by-side, class, fund of funds, and umbrella fund structures
• Foreign and emerging market funds
• Funds exempt under Rules 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940
• Tax structuring, including deferred compensation, UBTI and UBT issues
• ERISA (both avoiding “plan asset” status and advising funds to operate with plan asset status)
• Seed capital arrangements
• Investor negotiations and side letters
• Advice on “market” terms for funds based on investment strategies
• Hybrid hedge/private equity funds
• Advice on fund marketing materials and Web sites
• Advice on negotiating agreements with prime brokers, administrators and placement agents

• Partner compensation and tax planning 
• Employee compensation and employee benefit and reinvestment plans 
• Employment agreements and other employment issues (including sexual harassment and discrimination training programs)
• Restrictive covenants, such as non-competition, non-solicitation and golden handcuffs 
• Trusts and estate planning 
• Strategic corporate transactions, including sales, acquisitions, restructurings and spin-offs, minority strategic buy-ins and exit strategies

• Acquisition and financing of investments
• Structured finance products, including derivatives and swaps, CDOs, and other complex financial instruments
• Side pocket private equity investments
• Lending/investment activities
• Structuring tax efficient cross-border investments; PFICs, tax credits, hybrid entities and instruments
• Distressed debt investments
• Work-out or disposition of troubled or non-performing assets
• Representation in bankruptcy proceedings

• SEC, CFTC, NFA and NASD registration and compliance issues, including investment advisor, commodity pool operator and commodity trading advisor registration
• SEC audit compliance programs and training seminars
• Advice on trading rules and compliance
• Insider trading advice
• Schedule 13D, 13G, 13F and Section 16 filings
• Soft dollar use and best execution practices
• SEC audit, investigations and enforcement proceedings

• Customized political intelligence and analysis
• Early warning legislative and regulatory policy alerts
• Real-time analyst reports on breaking legislative and policy developments
• Transaction-related political strategy assessment
• Direct Federal and state advocacy on industry-related or portfolio investment issues
• Intellectual Property
• Litigation exposure
• Risk management solutions

• Foreign-managed funds
• Restructuring of foreign management companies
• Structuring of foreign investments, including the use of offshore tax-efficient structures
• Structuring management participation to maximize beneficial tax treatment for U.S. and non-U.S. managers
• Funds with a foreign investment strategy, including emerging market funds
• Inbound and outbound investment transactions

• Defense against investigations and enforcement actions by governmental agencies and self-regulatory organizations
• Litigation of civil and criminal cases involving investment, securities and financial matters
• Litigation in furtherance of investment strategies, such as activist fund strategies