Private Fund Formation

    At Jacko Law Group, our experienced Private Fund attorneys have a deep understanding of the risks and benefits associated with Private Funds. Advisers and managers of private funds require competent legal counsel knowledgeable in the full life cycle of a Private Fund and strategies to maximize its potential. Our team excels in guiding private fund managers from selecting the right entity to structuring and forming the fund, ensuring optimal results for our clients and their investors. Also, as a leading Corporate and Regulatory Compliance law firm, we are dedicated to representing our clients’ business interests while ensuring compliance with all regulatory obligations.

    Entity Selection

    For a Private Fund adviser, selecting the right entity is crucial to the fund’s success. Jacko Law Group’s Private Fund attorneys collaborate with clients to ensure the selected entity aligns with their goals and meets the needs of both investors and advisers, while also protecting the fund from potential business and regulatory risks. Each entity structure offers distinct pros and cons, influenced by the fund’s objectives, target investor types, regulatory requirements, and tax implications.

    Key Considerations for Entity Selection

    A private fund adviser must consider various factors when selecting the appropriate entity, including:

    • The total amount of capital to be managed
    • Whether the firm will engage in futures or other commodity interests
    • The identity and profiles of initial investors
    • Specific terms of investment

    Jacko Law Group combines business acumen with legal expertise to counsel clients on the most advantageous entity structures based on their unique needs and risk tolerance. Each entity type has characteristics that should be explored to ensure they align with the client’s strategy and goals. These include:

    • Limited Partnerships (LPs)
    • Limited Liability Companies (LLCs)
    • Master-Feeder Structures that can accommodate both onshore and offshore funds
    • Real Estate Investment Funds
    • Private Debt Funds
    • Venture Capital Funds

    Structuring and Formation

    After selecting the appropriate Private Fund entity, the next essential step is structuring it to provide optimal protection for the business. A private fund can fail under excessive operational costs if not structured correctly, or if other risk factors are overlooked. It must be designed to ensure that the investment strategy and various fund features appeal to even the most discerning investors.

    During the structuring and formation stage, Jacko Law Group’s Private Fund lawyers consider key elements of the fund, including:

    • Investment Minimums
    • Investment Advisory and Performance-Related Fees
    • Unique Circumstances: Side Pockets, Redemptions In-Kind, and Special Allocations
    • Acceptance of ERISA Investors
    • Unrelated Business Income Tax (UBIT)
    • Prime Brokerage, Custody, Administration, and Audit
    • International Swaps and Derivatives (ISDA) and Securities Lending Arrangements
    • Trading, Market Data, Valuation, and Trade Analytics
    • Directors & Officers (D&O) and Errors & Omissions (E&O) Insurance

    The Private Fund attorneys at Jacko Law Group have a comprehensive understanding of the nuances that can impact a Private Fund’s appeal to investors and the necessary safeguards to protect the fund, its investors, and the fund adviser or manager. Our attorneys provide guidance on these critical elements and more when structuring and forming a Private Fund, including:

    • Completing corporate formations in Delaware, California, and other jurisdictions
    • Managing registrations with the SEC, state authorities, or as an Exempt Reporting Adviser (ERA)
    • Registering with the NFA as a Commodity Trading Adviser/Commodity Pool Operator
    • Advising on seed capital strategies
    • Offering insights on contingencies for significant events such as future valuations, put/call provisions, and the withdrawal or termination of a principal due to death or disability
    • Addressing key regulatory compliance considerations for the firm’s infrastructure and compliance program

    If you are in the process of forming your Private Fund, schedule a consultation with our knowledgeable attorneys to discuss your specific needs and how we can assist you in achieving your goals.