Overview
Fund formation translates an investment strategy into a legal vehicle that investors can commit to and that a manager can operate. The structure has to fit the strategy, the target investors and the regulatory environment in the places where the fund will be established and marketed.
What the work covers
- Strategy and investor review: who will invest, how much, and on what expectations
- Choice of vehicle and domicile, with local counsel in the domicile jurisdiction
- GP, manager and carried interest vehicles
- Fund economics: management fee, distribution waterfall, carried interest, expenses
- Governance: investment committee, advisory committee, conflicts and valuation
- Key-person, removal and termination provisions
- Investor documentation: offering document, fund agreement, subscription documents
- Side letters and most-favoured-nation arrangements
How the work is organised
- Structuring workshop — strategy, investor base, timeline and constraints.
- Term sheet — the principal terms of the fund in plain language.
- Documentation — fund agreement, offering and subscription documents, with local counsel.
- Launch support — investor questions, negotiation of side letters, first closing.
What you receive
- A fund structure paper with diagram
- A fund term sheet
- The fund documentation set, as agreed in scope
- A closing checklist for the first close
Good to know
Marketing and management of investment funds are regulated activities in many jurisdictions. Regulatory analysis is carried out with counsel in the relevant jurisdictions, and its outcome cannot be presumed in advance.