Hedge Funds

Chadbourne & Parke has a significant practice representing institutional and start-up sponsors of hedge funds and hedge fund of funds, providing entrepreneurial, pragmatic and proactive advice to our clients. Chadbourne also specializes in seed investor arrangements, managed account arrangements, joint venture structures and other complex investment structures in every major tax jurisdiction in the world. Our experience covers fund formation, management structuring, regulatory and compliance issues, and deal execution and investments. Chadbourne also represents many investors in hedge funds, giving us a broad overview of the market.

We have deep expertise in regulatory and compliance issues affecting hedge funds and their managers, including issues arising under the Investment Company Act of 1940, the Investment Advisers Act, the Commodity Exchange Act, ERISA, broker-dealer/FINRA regulations and state privacy laws affecting funds. Chadbourne attorneys regularly counsel clients on drafting compliance policies and procedures, regulatory examinations, and day -to-day advice with respect to issues such as performance and advertising issues, and brokerage and portfolio trading practices.

Our hedge fund practice, based in New York and London, is supported by experienced attorneys in our other worldwide offices. Chadbourne's private funds team currently includes four corporate partners, three tax partners, two restructuring partners, one counsel and an ERISA/employee benefits partner. Our lawyers have direct experience on the business side, including a former senior officer of a multi-billion dollar European hedge fund and a former in-house counsel for a large hedge fund of funds.

We have a broad range of experience organizing absolute return funds, fixed income funds, event-driven and distressed debt funds, among others, utilizing both parallel and master/feeder structures for both onshore and offshore funds. We have structured complex transactions throughout the world, with particular strengths in energy/infrastructure and emerging markets such as Latin America, the U.S. Hispanic market, Central and Eastern Europe, India, Turkey and the Middle East, as well as Canada.

We also regularly represent hedge funds in their investments in the capital structures of distressed companies on a worldwide basis. We have a solid record of achieving successful outcomes for our funds clients in all areas of financial restructuring, business turnaround and formal insolvencies, particularly work-outs of distressed debt, structured credit and securitized assets.

Our lawyers have worked with numerous placement agents worldwide and have negotiated fund terms with major corporate, public and private pension plan, private family, foundation and endowment, fund of fund and foreign government investors who invest in private funds. Chadbourne’s fund-level advice covers matters such as structuring acquisitions and dispositions, co-investment arrangements and management-level issues (including compensation, performance fee allocations, admissions and departures, wealth management, investment advisor/broker-dealer matters, consulting arrangements and infrastructure).

Chadbourne’s tax lawyers bring deep knowledge of and experience in the tax aspects of structuring multi-national transactions and partnerships. We enhance this capability through extensive and long-standing relationships with top-tier local tax professionals around the world. Chadbourne is well versed in managing the needs of different kinds of private fund investors, including taxable, tax-exempt (both pension and endowment), non-U.S. and sovereign entities. Our partners can creatively handle the complexities of Unrelated Business Taxable Income (UBTI), Effectively Connected Income (ECI), Foreign Investment Real Property Tax Act (FIRPTA) and other tax-intensive investments.

Representation of Hedge Fund Sponsors

Representative hedge fund clients include:

• Abdiel Capital
• Citigroup Alternative Investments
• GLG Partners
• Marathon Capital Management
• Moon Capital Management
• Renaissance Capital
• SBP Group

Our lawyers have also represented numerous other hedge fund managers on fund formation, ongoing regulatory and compliance issues and other matters, including:

• CITIC Capital Markets Holdings Ltd.
• Hayman Capital
• Hermeneutica, LLC
• Highland Capital Management
• Investure
• Ivy Asset Management
• Jane Street Capital
• K Squared
• Marco Polo Investments Limited
• New Trading Desk Strategies
• Overlook Investments Limited
• Palio Capital Management
• Plainfield Asset Management
• Sattva Investment Advisors Ltd.
• Solus Alternative Asset Management
• Tremont Group Holdings, Inc.
• Vanquish Capital Group LLC
• Vision Investment Management Asia Limited

Select Chadbourne sponsor-side matters include:

• Abdiel Capital. We represented Abdiel Capital in the structure and formation of Abdiel Partners, LP, Abdiel Qualified Onshore Partners, L.P. and Abdiel Qualified Offshore Partners, Ltd., a family of long-only hedge funds with special limited partner rights for an anchor fund of funds investor.
• Alchemy Special Opportunities Fund L.P. We advised Alchemy Special Opportunities Fund L.P. regarding trading of corporate debt.
• Camulos Master Fund L.P. We advised Camulos Master Fund LP regarding trading of corporate debt.
• Eaglerock Capital Management. We represented Eaglerock Capital Management LLC, one of the largest shareholders of Delphi Corporation, the leading global supplier of mobile electronics and transportation systems (in chapter 11).
• GLG Partners, LP. We represented GLG Partners, a leading British alternative asset manager with gross assets under management of over $20 billion, in a $3.4 billion deal to access public markets through a reverse acquisition with Freedom Acquisition Holdings, Inc., a special purpose acquisition company or SPAC. The combined company has been renamed GLG Partners, Inc.
• Marathon Capital Management. We represented Marathon Capital Management in the structure and formation of Marathon Emerging Markets Fund, a hedge fund targeting investments in emerging markets instruments worldwide issued by sovereign and corporate entities, as well as The Avalon Fund, a hedge fund targeting investments principally in equity securities issued by companies in Eastern Europe, including Russia and Turkey.
• Renaissance Capital. We represented Renaissance Capital in the structure and formation of Russia Renaissance Fund SPC, a Cayman Islands-based investment fund listed on the Irish Stock Exchange with investments primarily in Russian and CIS equities. Chadbourne also represented Renaissance in the structure and formation of RenGaz Holdings Limited, a Cayman Islands-based investment fund listed on the Bermuda Stock Exchange invested in the local shares of Gazprom, a Russian natural gas company.
• SBP Group of Companies. We represented the SBP Group of Companies, a Venezuela-based sponsor, in the structure and formation of its emerging markets hedge funds. We also assisted SBP in the conversion of one of its hedge funds into a closed-ended recovery fund for assets affected by the REFCO bankruptcy.
• York Street Capital Partners. We represented York Street Capital Partners in the structure and formation of York Street Mezzanine Partners II, L.P., a US middle market mezzanine debt fund, as well as in the formation of its predecessor mezzanine debt fund.

Representation of Hedge Fund Investors

Chadbourne represents a broad range of investors in hedge funds and other private funds. We analyze and negotiate fund documentation, and have assisted clients in the launch of their hedge fund investing programs.

Representative investor clients include Corporacion Andina de Fomento, International Finance Corporation, and the University of Vermont. Chadbourne lawyers have also represented the following investors in their fund investments:

• California State Teachers Retirement System (CalSTRS)
• Connecticut General Life Insurance Company (CIGNA)
• Oregon Public Employees Retirement Fund (OPERF)
• Wafra Investment Advisory Group, Inc.
• Washington State Investment Board

Distressed Situations

• Representation of senior creditors in the restructuring of structured investment vehicles, Golden Key, Mainsail and Axon Financial.
• Representation of some of the largest ex-prime brokerage clients of Lehman Brothers International (Europe) in relation to issues arising out of the Administration.
• Representation of a fixed income fund client in respect of its investments across the capital structure of the Wind Hellas group of companies.
• Representation of hedge fund clients in respect of various issues arising out of a number of structured products including RMBS,CMBS, CDOs and CLOs.
• Representation of fund clients as counterparties to numerous CDS transactions.

Representative Experience