Investment Funds & Advisers Insights

Given the recent market volatility, we thought we would remind you about NAV decline triggers in your agreements with counterparties.  Most swap, securities lending and margin lending agreements (some of which may be in brokerage account agreements) include covenants that require your firm or its client or fund to notify

This is our annual letter briefly reviewing various issues that our investment adviser clients should consider over the next few weeks. Tax Changes 1. Tax Reform Bill. The Tax Cuts and Reform Bill changes the treatment of the “carried interest” allocable to some investment advisers to investment funds, and will

The President has signed the Tax Cuts and Reform Bill, which among other things changes the treatment of the “carried interest” allocable to most hedge fund managers (typically 20%). It provides that long term capital gain treatment within the manager’s carried interest generally will only be available with respect to

Department of Labor Fiduciary Rule to Take Effect June 9, 2017 The U.S. Department of Labor (“DOL”) regulation that expands the definition of “investment advice fiduciary” (the “Fiduciary Rule”) becomes applicable June 9, 2017, and will affect discretionary investment managers. Immediate Consequences of the Fiduciary Rule By June 9, 2017,

The SEC recently clarified when an investment adviser will be deemed to have custody of client assets in certain separate account situations, through a No-Action Letter and IM Guidance Update. In the recent Investment Advisers Association No-Action Letter, the SEC staff stated that an adviser is deemed to have custody

Investment managers that hold non-U.S. securities (including interests in offshore master funds) for their own accounts or the accounts of their U.S. clients and funds may be required to file Treasury International Capital Form SHC (“Form SHC”) with the Federal Reserve Bank of New York.  Form SHC is part of

This is our annual letter briefly reviewing various issues that our investment adviser clients should consider over the next few weeks. Federally Registered Investment Advisers 1. Annual Updating Amendment to Form ADV.  If your firm is an SEC-registered adviser, it must amend its Form ADV each year on the IARD

On April 10, 2017, the U.S. Department of Labor (“DOL”) final regulation (the “Final Regulation”) that redefines what constitutes “investment advice” that makes the advice provider (including an investment advisory firm) a “fiduciary” to plans, plan participants and IRA owners (“Retirement Plan Investors”) under the Employee Retirement Income Security Act

The SEC recently adopted amendments to Form ADV (the “Amendments“) that modify the requirements of Part 1A of Form ADV to: (1) formalize an “umbrella” registration option for multiple advisers that operate a single advisory business; (2) require additional information about separately managed accounts (“SMAs”) that is similar to information

The SEC focuses closely on the calculation and distribution of performance information, including through examinations of investment advisers conducted by the Office of Compliance Inspections and Examinations. There have been multiple recent SEC enforcement settlements and complaints that allege falsified performance information (see SEC commentary regarding QED Benchmark Management LLC,

Increasingly, hedge funds are emulating their private equity counterparts by making what are commonly referred to as “co-investments.”  Occasionally, a hedge fund manager will come across an attractive investment opportunity that is either inappropriate for its fund or too large to allocate solely to the fund.  In that case, the

New Regulation. On April 8, 2016, the U.S. Department of Labor (“DOL”) issued its long-awaited final regulation redefining what constitutes “investment advice” that makes the advice provider a “fiduciary” to plans, plan participants and IRA owners under ERISA and the prohibited transaction excise tax rules of Internal Revenue Code (“Code”)

The federal Defend Trade Secrets Act (the “DTSA”) became effective on May 11, 2016.  It permits companies to pursue a federal remedy for misappropriation of their trade secrets.  Before the enactment of the DTSA, private rights of action for trade secret misappropriation were governed exclusively by state law.  The DTSA

On June 28, 2016, the SEC proposed new Rule 206(4)-4 and amendments to Rule 204-2 under the Advisers Act that would require SEC-registered investment advisers to establish business continuity and transition plans.   Existing Advisers Act Rule 206(4)-7 requires advisers to adopt formal written compliance policies, and the SEC has previously

The U.S. Securities and Exchange Commission (the “SEC”) has raised the net worth threshold under the “performance fee rule” from $2,000,000 to $2,100,000. This increase, which the SEC announced in Release No. IA-4421, adjusts for inflation the net worth test used to determine whether a client or investor is a

The term “Blue Sky Laws” refers to the laws of U.S. states that prohibit the fraudulent sale of securities. This post is the second in a two-part series on securities and gives a general overview of some of the state securities laws and regulations that may apply to domestic private

Summary. We encourage you to consider obtaining federal trademark protection for the names and logos of your advisory firm and investment funds as part of your overall marketing and intellectual property strategy. We are happy to assist you in this process. Some basic considerations when choosing and protecting a name

Federal and state securities laws and regulations have evolved over time to create a complicated set of rules that apply each time a private investment fund, such as a hedge fund, private equity fund, real estate fund or venture fund, offers or sells interests in that fund. This post is

Welcome to the Insights page for the Investment Funds & Advisers group at Shartsis Friese LLP.   This inaugural post is intended to let you know what you can expect from this page. In our many years practicing in the investment management and private funds space, we have developed a significant amount

This is our annual letter briefly reviewing various issues that our investment adviser clients should consider over the next few weeks. Federally Registered Investment Advisers 1. Annual Updating Amendment to Form ADV. If your firm is an SEC-registered adviser, it must amend its Form ADV each year on the IARD