Fund Capital Raising

  • Overview
  • Attorneys

The sale of fund interests to investors is subject to federal and state securities laws, including broker-dealer regulations that may apply to persons selling these securities on behalf of the fund. Our attorneys are experienced with the rules allowing these offerings to be conducted either on a private basis without registration with the United States Securities Exchange Commission (SEC) or applicable state “blue sky” commissions, or through the process of conducting public offerings (both initial public offerings (IPOs) and follow up offerings) of fund securities which are registered with the SEC.

Our lawyers also have considerable experience providing guidance to our private investment company sponsors to help them maintain their exemption from registration and regulation under the Investment Company Act of 1940 and the Investment Advisors Act of 1940. Recent changes brought about by the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 have changed the regulatory landscape for the sponsors of investment funds. The exemption for registration under the Investment Advisors Act of 1940 on which many sponsors of private investment funds had historically relied upon was repealed on July 21, 2011 and will be replaced by a number of more focused exemptions. Lawyers in the Private Investment Group can help existing fund sponsors determine whether or not they will need to become registered investment advisors as a result of these new regulations as well as assist fund sponsors in organizing new investment funds so as to fall into one of the new exempt categories.

To the extent funds raise capital from pension plans or other employee benefit plans, they can become subject to regulation under the Employee Retirement Income Security Act (ERISA) which may limit the ability of a fund to carry out its investment plan as the sponsor intends. Our attorneys work closely with our Employee Benefits Practice Group to make sure that a fund does not become subject to these ERISA plan asset rules, including advising clients on how to structure a fund as a venture capital operating company as defined under ERISA.