Comprehensive Counseling Services for Private Fund Advisers

A private fund adviser must take into account many variables when forming their entity. These variables may include how much money will be managed, whether the firm will manage futures or other commodity interests, who will be the initial investors in the entity, and what are the terms for investment.

Jacko Law Group, PC (“JLG”) can provide the following private fund counsel services:

    • Completing corporate formations in Delaware, California and elsewhere
    • Completing registrations with the SEC, state, or as an Exempt Reporting Adviser (ERA)
    • Registering with the NFA as a Commodity Trading Adviser/Commodity Pool Operator
    • Providing counsel regarding seed capital
    • Offering guidance on contingencies for important events: future valuation, put/call provisions, death, disability, withdrawal, or termination of a principal
    • Discussing important regulatory compliance considerations for the firm's infrastructure and compliance program

Fund Structures & Third-Party Service Agreements

A private fund can collapse under the weight of its own expenses if it is structured improperly or if the third-party service agreements have not been thoroughly negotiated and vetted in regards to the services and responsibilities of the parties. A private fund also must be structured so that the investment strategy and the various fund features are appealing to the most discriminating of investors. JLG has the experience and expertise to discuss the practical aspects of:

    • Partnerships and Limited Liability Companies (LLCs)
    • Onshore and offshore side-by-side funds and master-feeder funds
    • Commodity pools
    • Investment minimums
    • Investment advisory and performance-related fees
    • Unique circumstances: side pockets, redemptions in-kind and special allocations
    • Accepting ERISA investors
    • Unrelated business income tax
    • Prime brokerage, custody, administration, and audit & tax
    • International Swaps and Derivatives (ISDA) and securities lending arrangements
    • Trading, market data, valuation, and trade analytics
    • D&O and E&O insurance

Securities & Commodity Regulations

The regulations governing private funds are complex. Investors can assert powerful legal rights against the private fund adviser who runs afoul, even inadvertently, of the labyrinth of securities and commodity regulations. We can provide guidance related to:

    • Private funds under sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940
    • Private placements under Regulation D
    • Activities triggering broker-dealer registration
    • JOBS Act and crowdfunding
    • Limitations on performance fees
    • Form PF
    • Regulation S-ID
    • NFA registration exemption for de minimis positions
    • Registration lite
    • Full NFA registration as a Commodity Trading Adviser/Commodity Pool Operator
    • NFA registration of associated persons

Intellectual Capital Protection & Other Employment Agreements

For the private fund adviser, the collective power of employee ideas and hard work is a proven way to build competitive strength. Your clients are the backbone of your business, and your investment process is the secret formula that makes you unique. Too often, private fund advisers fail to implement safety measures to protect their intellectual capital. Without such protections in place, your business could be harmed or even destroyed. Structuring expectations early on with your employees will help. JLG can assist by providing customized:

    • Confidentiality agreements and IP assignment agreements
    • Procedures for handling intellectual capital
    • Training to heighten awareness to confidentiality
    • Compensation arrangements for portfolio management and sales personnel
    • Counsel related to non-solicitation and non-compete provisions

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