Private Fund Formation

At Jacko Law Group, our experienced Private Fund attorneys have a deep understanding of the risks and benefits associated with Private Funds. Advisers and managers of private funds require competent legal counsel knowledgeable in the full life cycle of a Private Fund and strategies to maximize its potential. Our team excels in guiding private fund managers from selecting the right entity to structuring and forming the fund, ensuring optimal results for our clients and their investors. Also, as a leading Corporate and Regulatory Compliance law firm, we are dedicated to representing our clients’ business interests while ensuring compliance with all regulatory obligations.

Entity Selection

For a Private Fund adviser, selecting the right entity is crucial to the fund’s success. Jacko Law Group’s Private Fund attorneys collaborate with clients to ensure the selected entity aligns with their goals and meets the needs of both investors and advisers, while also protecting the fund from potential business and regulatory risks. Each entity structure offers distinct pros and cons, influenced by the fund’s objectives, target investor types, regulatory requirements, and tax implications.

Key Considerations for Entity Selection

A private fund adviser must consider various factors when selecting the appropriate entity, including:

  • The total amount of capital to be managed
  • Whether the firm will engage in futures or other commodity interests
  • The identity and profiles of initial investors
  • Specific terms of investment

Jacko Law Group combines business acumen with legal expertise to counsel clients on the most advantageous entity structures based on their unique needs and risk tolerance. Each entity type has characteristics that should be explored to ensure they align with the client’s strategy and goals. These include:

  • Limited Partnerships (LPs)
  • Limited Liability Companies (LLCs)
  • Master-Feeder Structures that can accommodate both onshore and offshore funds
  • Real Estate Investment Funds
  • Private Debt Funds
  • Venture Capital Funds

Structuring and Formation

After selecting the appropriate Private Fund entity, the next essential step is structuring it to provide optimal protection for the business. A private fund can fail under excessive operational costs if not structured correctly, or if other risk factors are overlooked. It must be designed to ensure that the investment strategy and various fund features appeal to even the most discerning investors.

During the structuring and formation stage, Jacko Law Group’s Private Fund lawyers consider key elements of the fund, including:

  • Investment Minimums
  • Investment Advisory and Performance-Related Fees
  • Unique Circumstances: Side Pockets, Redemptions In-Kind, and Special Allocations
  • Acceptance of ERISA Investors
  • Unrelated Business Income Tax (UBIT)
  • Prime Brokerage, Custody, Administration, and Audit
  • International Swaps and Derivatives (ISDA) and Securities Lending Arrangements
  • Trading, Market Data, Valuation, and Trade Analytics
  • Directors & Officers (D&O) and Errors & Omissions (E&O) Insurance

The Private Fund attorneys at Jacko Law Group have a comprehensive understanding of the nuances that can impact a Private Fund’s appeal to investors and the necessary safeguards to protect the fund, its investors, and the fund adviser or manager. Our attorneys provide guidance on these critical elements and more when structuring and forming a Private Fund, including:

  • Completing corporate formations in Delaware, California, and other jurisdictions
  • Managing registrations with the SEC, state authorities, or as an Exempt Reporting Adviser (ERA)
  • Registering with the NFA as a Commodity Trading Adviser/Commodity Pool Operator
  • Advising on seed capital strategies
  • Offering insights on contingencies for significant events such as future valuations, put/call provisions, and the withdrawal or termination of a principal due to death or disability
  • Addressing key regulatory compliance considerations for the firm’s infrastructure and compliance program

If you are in the process of forming your Private Fund, schedule a consultation with our knowledgeable attorneys to discuss your specific needs and how we can assist you in achieving your goals.

Private Fund Types

Our attorneys offer experienced legal counsel tailored to the needs of a wide range of private fund types. Our team supports private fund advisers and managers with the corporate and regulatory aspects involved in fund formation, structuring, compliance, and transactions.

Private Fund Types We Work With

Private Equity Funds
Private equity funds involve pooling capital to invest in private companies within specific sectors. Our private fund attorneys assist in structuring investments, raising capital, advising on portfolio management and governance, and handling M&A transactions. We also provide in-depth counsel on fund operations and compliance.

Venture Capital Funds
The attorneys at Jacko Law Group work with venture capital funds to secure capital for start-ups and high-growth companies. We assist in structuring investments, crafting strategic investment vehicles, and facilitating negotiations on key fund terms, including ownership and liquidation. We also draft shareholder agreements and navigate complex regulatory compliance.

Our team has extensive experience guiding venture capital funds through the entire investment lifecycle, from initial funding rounds to successful exits. Jacko Law Group serves as trusted advisors to venture capital funds, dedicated to maximizing goals and mitigating risk.

Angel Funds
For managers of high-net-worth investors interested in Angel Funds, Jacko Law Group offers comprehensive services that guide and protect those managing angel funds. We provide extensive legal and business experience in structuring investment vehicles, negotiating terms, and offering legal and regulatory compliance support for angel fund investment managers.

Investment Clubs
Investment Clubs involve pooling resources to make investments in stocks, bonds, real estate, or private companies. Investment Clubs can yield better returns and offer valuable learning opportunities but require sound legal counsel to minimize business and compliance risks. Jacko Law Group can assist investment clubs with fund formation, structuring, ongoing governance advice, investment strategy, and regulatory compliance to meet federal and state requirements.

Private Debt Funds
Jacko Law Group attorneys support fund managers in structuring Private Debt Funds, which lend capital to private companies or debt funds. Our team manages debt investments, loan agreements, collateral, and ensures legal and regulatory compliance. We also offer tax-efficient structuring for debt-based investments, conduct due diligence, and assess corporate and regulatory risks.

Real Estate Funds
Real Estate Funds allow investors to pool money for investments in residential, commercial, or industrial properties. Our private fund attorneys provide guidance on structuring real estate investments, evaluating financing options, managing assets, and ensuring compliance with real estate regulations and related laws.

Angel Investing
Angel investors provide capital to startups in exchange for equity or convertible debt. Our attorneys offer corporate legal counsel and securities regulatory counsel for structuring angel investments, performing due diligence, navigating regulatory requirements, and protecting investor interests. We help structure the most advantageous investment vehicles and ensure optimal tax structures for angel investors.

Why Choose Jacko Law Group?

Private funds are a dynamic but risky investment sector. Private Fund Investment Advisers are aware of the volatility and complexities involved and rely on Jacko Law Group as their trusted partner. We understand the nuances of various fund types and offer tailored legal strategies that support investment goals while minimizing risk. Whether you are launching a new fund or managing an existing one, we are here to guide you through every step.