Clifford Chance works with hedge funds at all stages of their life cycle.
As funds are established, we advise on licensing, fund structuring and formation work. Once established, we can offer transactional, derivatives, securities, tax and ERISA capability, while continuing to advise managers on ongoing regulatory, compliance and enforcement matters. We are also advising funds investing in distressed debt through our restructuring practice.
In an era of unprecedented regulatory change in the investment management industry, we are focused on advising our clients on the potential impact of regulations across the globe; from the US Investment Advisers Act, swaps and derivatives regulations under the Dodd-Frank Act, the EU Alternative Investment Fund Managers Directive and the Chinese QDLP regime, to licensing and business conduct rules where the funds operate.
Our close day-to-day contact with regulatory bodies in key financial centres around the world helps us to anticipate regulation that will be relevant to hedge fund managers in the future, while our close working relationships with prime brokers and various professional hedge fund industry associations ensure that we are plugged in to the daily issues experienced by hedge funds. This deep level of industry connectivity allows us to provide the dynamic, responsive service from inception to downstream activity that our hedge fund clients have come to expect from us.
- Asia Research & Capital Management Limited on the establishment of a closed-ended fund to invest in distressed debt and equity securities in Asia-Pacific
- Asia Research & Capital Management Limited on the establishment of an open-ended fund to invest in distressed debt and equity securities in Asia-Pacific with a perpetual term
- AQG Capital Management in relation to the establishment of Able Quant Asia Pacific Fund
- OCP on the establishment of their Orchard Landmark fund
- Man Group plc on its purchase of the entire issued share capital of FRM Holdings Limited, a global hedge fund research and investment specialist with funds under management of approximately US$8 million
- Azentus Capital on its establishment and the set up of Azentus Global Opportunities Fund
- Double Haven on the transfer of a number of hedge funds from SPARX/PMA and the establishment of Double Haven Asia Absolute Bond Fund
- A number of hedge funds, including Argyle Street Management, SCM Strategic Capital Management, Orchard Capital Partners, Capital Dynamics and others, on full SEC registration or exempt reporting adviser status under the US Investment Advisers Act
Clifford Chance's global investment management expertise allows us to advise on the complexities of a number of authorised and registered funds and fund formats from designated jurisdictions, including UCITS, Exchange Traded funds and 40 Act funds.
The popularity of UCITS and other authorised funds is likely to continue in light of the global proliferation of the marketing and sales of these funds beyond their home borders. Indeed, in the wave of regulatory change post-financial crisis, many of these fund formats are finding favour as an alternative fund structure that can be adopted in one country and marketed in another.
In addition to our understanding of these funds in their home jurisdictions, we are able to advise on their acceptability and use within other jurisdictions. We can advise on all aspects of these fund formats, including the structuring and launching of funds, listing, custody, outsourcing, prospectus requirements, and prospectus liability issues as well as distribution issues.
Especially in relation to the EU's UCITS IV directive, clients now face new legal/organisational requirements which require legal advice in additional areas, such as regulatory and tax advice.
Exchange traded funds
The exchange traded funds (ETF) sector is one of the fastest growing segments of the investment management industry today. ETFs are passively traded index-tracking funds that trade in real-time on exchanges with constantly changing prices, unlike traditional mutual funds which are priced once a day.
In just ten years, the number of listings of ETFs in the US alone has grown from virtually zero to over 1,000, with several major financial institutions each managing ETFs worth several billion dollars. Investors added US$56 billion more than they withdrew from ETFs in 2009, pushing the segment's total assets to more than US$700 billion in September 2009.
Clifford Chance has advised clients since the introduction of ETFs and has advised on the introduction of such funds to exchanges around the world.
In the current climate of regulatory change, ETF manufacturers and distributors face unique challenges in a number of markets. Our detailed knowledge of ETF products, combined with our understanding of the current regulatory environment, makes us the adviser of choice for the ETF industry.
Clifford Chance is recognized as the global market leader in working with alternative fund managers to establish and operate the full range of alternative private investment funds. Our team works closely with our colleagues in the firm's Private Equity, Real Estate and Energy & Infrastructure groups.
The firm also advises investors in such funds, including pension funds, insurance companies, funds-of-funds and many sovereign wealth and other supra-national institutions. Our team has advised on some of the largest and most complex private fundraisings in the global market.
Our recognition as a global leader in the field has been established due to our expertise across our international network, with market-leading teams in Europe, Asia and the US. The global nature of the private funds market means that our extensive network of offices is a major benefit to clients.
The firm advises managers on fund establishment, structuring and marketing as well as ongoing operational issues, secondary transactions and restructuring mandates. We also actively advise our clients on their licensing and regulatory requirements. This is an area which has seen significant interest given the unprecedented regulatory change in the investment management industry, including the impact of the EU Alternative Investment Fund Management Directive (AIFMD) and the Investment Advisers Act in the US. Clifford Chance keeps its clients in the funds sector ahead of the pack by maintaining one of the largest financial services regulatory teams in the world. In addition to regulatory support, with one of the largest international tax groups of any law firm, our combined team provides clients with comprehensive advice on all aspects of private fund establishment and investment structuring issues.
Even in today's challenging markets, wealth management continues to be a key focus area for global and national banks. The challenge is to adapt products and business models and shape them in light of the post financial crisis economic and regulatory environment.
The retail banking and wealth management sectors continue to experience political, fiscal, tax and regulatory pressures. International focus on cross-border wealth management, retail banking and compliance with local licensing and marketing requirements has not abated. Regulators are now more intrusively requiring banks to keep more extensive records and to pay more attention to ensuring that clients' money is invested in line with their objectives and financial circumstances, and that they understand investment products and risks. In the UK, financial institutions and wealth managers are in the post RDR world, facing changed business models and pricing structures and moving on to the next wave of regulatory change implementation, including EMIR and AIFMD. Furthermore, the sector is witnessing extensive reshaping and consolidation on a cross border and domestic basis.
The wealth management and retail sectors are key areas of focus for Clifford Chance. We have established a dedicated, cross-practice team to meet all of the legal needs of our clients in this industry, drawing on our experience across investment management, banks and financial institutions sectors around the globe.
The investment management industry currently faces unprecedented regulatory change on a global basis. No other law firm is better placed to address these challenges for investment management clients than Clifford Chance.
The industry includes a wide range of participants, from corporates, financial institutions and sovereign wealth funds to individuals, each managing very different and often diverse assets in accordance with very different strategies. The needs of a global private equity fund, for instance, are very different from those of a start-up hedge fund manager.
However, both face the same demands for superior performance from their investors. Coupled with the new world of increased regulation with its extra-territorial application, and the increasing requirements of investors for a more institutional approach, an investment manager's job is harder than ever.
Our understanding of each part of the investment management industry, coupled with our global network of expertise, allows us to tailor our advice to a client's exact needs while accessing the very latest market thinking and advice from around the world, whether under Dodd-Frank or in relation to AIFMD or EMIR.
We advise on fund formation, licensing, tax, transactional and M&A, as well as on contentious matters. We also advise on regulation affecting the investment management industry across the financial markets, including on all the up-to-the-minute developments. With experienced lawyers from our international network, we can offer a global or local solution as you require, including advice on the impact of extra-territorial rules in each jurisdiction.
Our clients include the world's leading asset management companies, alternative investment funds, private equity funds, insurance companies and private banking businesses. They range in size from household names with a five-continent footprint to start-up or spin-off funds.
With more change on the horizon for the investment management industry, it is essential that industry players select advice from those that specialise in their sector and understand their business and its drivers. Our lawyers focus only on investment management law, and have the industry knowledge to address your immediate needs – and to help predict your next challenge. We provide the legal innovation you can't live without.
Our global regulatory team is advising on and/or assisting with restructuring, reorganisation, amending fund documentation and/or license application in relation to AIFMD implementation for numerous asset manager clients across the globe, including clients based in Europe, the US and Asia.
- We advised Equistone on the Equistone Partners Europe Fund IV fundraising, Equistone's spin-out from the wider Barclays group, the establishment of the internal Equistone partnership arrangements and on the impact of the spin-out on the manager's three existing funds.
- We acted for HOPU Investment Management (a PRC private equity firm), on the fund establishment and regulatory aspects of a private equity fund, which will make China-related investments in various sectors including but not limited to consumer, resources (energy, mining, consumer, and agriculture) and financial services.
- We advised International Finance Corporation (IFC) on its Russian Bank Opportunity Fund. This target $1 billion fund was formed to offer an opportunity for select investors to participate in the continuing investment program of the IFC in the Russian Federation's financial sector.
- We advised AXA Real Estate Investment Managers in the setting up of the €2 billion pan-European debt fund Commercial Real Estate Senior 1 (CRE1) and in the various subsequent closings.
- We advised Credit Suisse on the sale of its ETF (exchange traded funds) business to BlackRock in the context of the integration of Credit Suisse's asset management operations into its larger private banking and investment banking arms.
- We advised Macquarie Bank Limited and the existing management team on the sale of MGPA Limited, a private equity real estate investment advising company, to Blackrock, Inc.
- We advised several clients who were among the first group of international hedge funds selected into Shanghai's pilot program on "Qualified Domestic Limited Partners". This program for the first time allows international hedge funds to access domestic Chinese investor capital by setting up a RMB-denominated feeder fund in Shanghai, which will be converted into USD and invested into offshore master funds.
- We advised a group of investment professionals on their spin out from Duet Private Equity Limited (Duet) in order to form DRC Capital, an independent investment advisor and asset manager in the real estate debt sector.