Hedge Fund Attorney

What does a hedge fund attorney do for a start-up hedge fund?

A hedge fund attorney is the first service provider a start-up hedge fund manager will likely contact.  The hedge fund attorney will listen to the manager and discuss the investment program.  From here the hedge fund attorney will begin drafting the hedge fund’s offering documents and may also suggest the other service providers the manager should talk to (including the administrator, auditor, and brokers or prime brokers).  After the offering documents have been finalized, the hedge fund attorney will help the manager with many of the logistical items which need to be addressed before the fund begins doing business.

Once the fund has started trading, the hedge fund manager may need the hedge fund attorney to do the following items:

–    Blue sky filings
–    Provide updates on relevant hedge fund laws
–    Revise the offering documents if necessary
–    Draft side letter agreements for certain investors
–    Make 13F filings on behalf of the manager
–    Make Form SH filings on behalf of the manager
–    Consult with the manager if investors have certain needs
–    Consult with the manager to start a new fund
–    Review marketing and other promotional materials
–    Answer hedge fund related questions
–    Help prepare manager for investment advisor or commodity pool operator audits (if necessary)
–    Hedge fund due diligence, potentially

In addition to the above, the hedge fund attorney is going to be a resource for the manager and the fund on an ongoing basis.  Hedge fund lawyers that have been around for a while and who have launched all sorts of funds will have generally experienced most issues that will arise in the hedge fund context.

What else does a hedge fund attorney do?

Besides drafting offering documents for the client, a hedge fund lawyer needs to understand what is going on in the industry.  As such the hedge fund attorney will spend a good portion of his day researching issues for clients, talking with service providers to see what are the developing trends within the industry, talking with regulators to see what are some of the things they are focusing on, in addition to other items.  Your hedge fund attorney should have an ear to the ground and understand the issues that affect you from both a business and regulatory perspective.

Hedge fund attorney – boutique or big firm?

Hedge fund attorneys usually work for either (i) boutique law firms that focus on securities law or the investment management industry or (ii) very large regional or national law firms.  Generally both types of attorneys are competent, produce good documents, and have the requisite knowledge of the industry.  In general, you will be looking at a cost issue.  Hedge fund formation costs can be high and if you use a very large law firm the legal costs could be double or more.

If you are a very large fund which will have over a billion dollars in assets during the first year of operation, you are probably going to go with the very large law firms that have very good reputations for hedge fund work.  Funds smaller than this may decide to go with the boutique firm for cost savings purposes, but they may also decide to go with the large law firms if they feel that there is need to show “name brand” service providers in their offering documents.  This might be the case if these funds are going to be shopping around for very large institutional investors during the first six months of operations.

Another issue to consider is who will be your contact person at the law firm.  Many start-up hedge funds choose to go with the boutique law firm because of the direct access to partners.  At the large law firms, most client matters are handled at the associate level and the partner may only talk to the manager once or twice.

Above all, the most important item when choosing a hedge fund attorney is to make sure you are comfortable with the attorney and his knowledge of the industry.  When starting out, the hedge fund start-up process can take up to two or more months depending on the complexity of the project, so you will want to make sure you have a good working relationship with your attorney.

21 thoughts on “Hedge Fund Attorney

  1. Pingback: Hedge Fund IRA Investments | Hedge Fund Law Blog

  2. Pingback: Hedge Fund Prime Brokerage | Hedge Fund Law Blog

  3. Pingback: Hedge Fund Administrator – What is a Hedge Fund Administrator? | Hedge Fund Law Blog

  4. Pingback: Hedge Fund Management Fees | Hedge Fund Law Blog

  5. Pingback: How to Register as an Investment Advisor | Hedge Fund Law Blog

  6. Pingback: Overview of the Securities Exchange Act of 1934 | Hedge Fund Law Blog

  7. Pingback: Hedge Fund Side Letters | Hedge Fund Law Blog

  8. Pingback: Hedge Fund PIPE Transactions | Hedge Fund Law Blog

  9. Pingback: Hedge Fund Side Pocket Investments | Hedge Fund Law Blog

  10. Pingback: Hedge Fund Performance Fee Issues for State Registered Investment Advisors | Hedge Fund Law Blog

  11. Pingback: State Registered Investment Advisors and Hedge Funds | Hedge Fund Law Blog

  12. Pingback: Long-Short Equity Hedge Funds | Hedge Fund Law Blog

  13. Pingback: Withdrawing from Investment Advisor Registration – the Form ADV-W | Hedge Fund Law Blog

  14. Pingback: California Investment Advisor FAQ — Hedge Fund Law Blog

  15. chet mazur

    I have 2 questions please.

    1) Do yo andu have a directory of “hedge fund attorneys”
    2) What would be the best way to find theall offshore hedge funds?

    Thanks.

  16. Pingback: Wall Street Reform and Consume Protection Act — Hedge Fund Law Blog

  17. Pingback: Massachusetts Hedge Fund Exemption — Hedge Fund Law Blog

  18. Pingback: Important Hedge Fund Articles — Hedge Fund Law Blog

  19. Pingback: Mini-Prime Brokers – Prime Brokerage for Start-up, Small and Mid-Sized Hedge Funds — Hedge Fund Law Blog

  20. Pingback: New Connecticut Hedge Fund Laws Proposed — Hedge Fund Law Blog

  21. Pingback: Proposed Hedge Fund Registration Bill Now Excludes VC Funds — Hedge Fund Law Blog

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.