Sidley has a premier, global practice in structuring and advising investment funds and advisers. Our Investment Funds, Advisers and Derivatives Practice group consists of more than 120 lawyers in New York, Chicago, London, Hong Kong, Singapore, Shanghai, Los Angeles and San Francisco.
We advise clients in the formation and operation of all types of alternative investment vehicles, including hedge funds, fund-of-funds, commodity pools, venture capital and private equity funds, private real estate funds and other public and private pooled investment vehicles. We also represent clients with respect to more traditional investment funds, such as open-end registered investment companies (i.e., mutual funds), closed-end funds and exchange-traded funds (ETFs). Our advice covers the broad scope of legal and compliance issues that are faced by funds, their managers and their boards under the laws and regulations of the various jurisdictions in which they may operate. In particular, we advise our clients regarding complex federal and state laws and regulations governing securities, funds and advisers including the Dodd-Frank Act, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, the USA PATRIOT Act and comparable laws in non-U.S. jurisdictions. We are often asked to analyze and resolve issues regarding the availability of an exemption or other basis for avoiding registration under the Investment Company Act or the Investment Advisers Act.
Our Investment Funds and Advisers Practice also includes professionals who advise clients in structuring and negotiating over-the-counter (OTC) derivatives transactions and counseling exchanges, clearinghouses, brokers and traders with respect to the regulation of exchange-traded derivatives. In addition, our recognized practice for real estate investment trusts (REITs) comprises part of this practice group.
In 2011, Sidley was named the “Best North American Law Firm” by Hedgeweek in its second annual Hedgeweek Awards. For the third consecutive year, and each year since the survey's inception, Sidley received first-tier national rankings for its Private Funds / Hedge Funds, Derivatives & Futures and Mutual Funds practices in the U.S.News - Best Lawyers “Best Law Firms” survey, published by U.S.News & World Report. In the 2013 survey, Sidley received the most first-tier rankings in the U.S. in the Private Funds/Hedge Funds Law. Sidley was recognized as the “Best Onshore Law Firm – Client Service” at the Hedge Fund Manager (HFM) European Hedge Fund Services Awards 2012. Sidley was shortlisted and “highly commended” in the category of “Best Onshore Law Firm” at those awards in 2010. The firm was also named as the 2009 “Best Onshore Law Firm” in HFM’s inaugural U.S. Service Provider Awards. HFM Week is a weekly publication produced for the international hedge fund community.
In 2008, the firm was named "Investment Funds Team of the Year for the U.S." by Chambers and Partners and is one of two firms to have been recognized as a top tier Investment Funds – Hedge Funds firm in Chambers USA since the inception of the category rankings in 2008, including in the current 2011 rankings. Additionally, Chambers has recognized the firm as a leading Investment Funds – Registered Funds firm during the same time period. Additionally, Institutional Investor’s Alpha Magazine ranked Sidley as the number one onshore U.S. hedge fund law firm in 2006 and 2007, and number two overall in 2008 and 2009 in the Alpha Awards™ for hedge fund legal service providers. Sidley was named as the Best Law Firm for Alternative Assets in 2012, 2010 and 2008; Best Onshore Law Firm in Asia (ex-Japan) and Best Onshore Law Firm in Japan in 2011; and Best Onshore Law Firm for Asset Management in Japan in 2009 by AsianInvestor magazine. In 2007, the firm was named Investment Funds Law Firm of the Year by Asian Legal Business.
Investment Funds and Advisers
For decades Sidley has had a strong commitment to, and has been a recognized leader in, counseling traditional and alternative asset managers.
We represent hundreds of investment advisers, commodity pool operators, commodity trading advisers and mutual fund boards of directors, including some of the most prominent names in alternative and traditional asset management. We also regularly counsel start-up managers—and those seeding them—regarding the structuring of their businesses and funds. We have advised with respect to thousands of registered and unregistered funds in virtually every financial center in the world.
We are consistently recognized by our clients, peers and the investment management industry as providing outstanding client service and market-leading advice. We are at the forefront in new product development, participating in the structuring, organization, registration, servicing and/or distribution of a wide array of innovative funds, derivative instruments and structured investment products, including:
- Hedge Funds — the full scope of hedge fund structures, products and offerings, including a $1 billion rated, principal-protected note offering backed by hedge fund assets.
- Permanent Capital Transactions — the first medium-term note program backed by hedge funds, raising permanent capital for investment and trading purposes.
- Alternative Asset Manager IPO — underwriter's counsel in the first U.S. initial public offering listed on the NYSE of interests in an alternative asset management company.
- ETFs — registered as investment companies and commodity pools, including the first commodity index ETF and the first leveraged currency ETF.
- Fund of Private Equity Funds — the first fund of private equity funds registered under the Investment Company Act and the largest secondary fund of funds private equity funds roll-up transaction.
- Publicly Offered Venture Capital Partnerships — the first publicly offered partnership designed to invest in venture capital opportunities.
- Innovative Fund Products in Asia — development of a variety of innovative fund products in Asia, including the first Hong Kong exchange traded fund and the first property fund in mainland China with direct foreign investment.
- Private Real Estate Fund for Properties in Turkey — fund counsel on a recently completed offering of a private real estate fund investing in properties in Turkey.
- Principal Protected Funds — numerous U.S. and offshore principal protected funds.
- Business Development Companies — several of the first funds organized and registered as BDCs.
- Commodity Pools — many of the first private and public commodity pools.
- Master-Feeder Structures — U.S. and offshore master-feeder structures for a variety of public and private funds.
- Employees' Securities Companies — numerous funds qualifying as employees' securities companies under the Investment Company Act.
- REIT M&A — Represented Equity Office Properties in its acquisition by Blackstone, one of the largest leveraged buyout transactions in history.
As our clients have grown more global, so have we. Our London and Hong Kong offices have a robust and growing base of European and Asian clients that our U.S. offices service with respect to U.S. legal and regulatory matters. Likewise, our London and Hong Kong offices advise our U.S.-based clients with respect to applicable laws and regulations in Europe and Asia.
All of our offices work with service providers in fund-friendly jurisdictions to organize investment funds and transactions. Our offshore funds include numerous exchange-listed, credit-enhanced, master-feeder, multi-series and other non-standard structures. We work closely with a large network of offshore counsel, accountants and administrators in Europe, Asia, the Caribbean jurisdictions and other tax havens.
Broad, Sophisticated Client Base
Our group's clients include sponsors and managers of hedge funds, private equity/venture capital fund managers, real estate funds, investment advisers, commodity pool operators, commodity trading advisors, banks, securities and futures brokerage firms and other participants in the U.S. and non-U.S. securities and derivatives markets.
Comprehensive Legal Advice
We provide our clients with "one-stop shopping," permitting them to call on us for any legal need that may arise. In serving our clients, our group utilizes the extensive experience of Sidley's other practice areas, including corporate, securities regulatory, tax, employee benefits, banking, bankruptcy, estate planning, intellectual property, real estate, labor and litigation.
OTC and Exchange-traded Derivatives
There are OTC derivatives lawyers in virtually every transactional practice group at Sidley. However, our group houses professionals in both OTC and exchange-traded derivatives, making us a nerve-center for regulatory, jurisdictional and deal-structuring advice. Derivatives lawyers within our practice service not only our investment adviser and fund clients but also a much broader spectrum of participants in the financial markets, including dealers, insurance companies and other end-users of derivatives.
We advise clients — including banks, investment managers, securities and futures brokerage firms, exchanges and clearing organizations, international agricultural concerns and other participants in the U.S. and non-U.S. securities and derivatives markets — on the creation of innovative derivative instruments and structured investment products that are traded on exchanges and offered in the OTC markets. Our services to these clients include transactional representation, regulatory compliance counseling, representation in regulatory approval proceedings and (with assistance from our litigation groups) representation in civil litigation, regulatory enforcement and arbitration proceedings. Our practice brings us into frequent contact with the departments of governments, regulatory agencies and exchanges that supervise the securities and derivatives markets.
We also advise governments on the establishment of derivatives markets, and have drafted statutory codes and regulations providing for and regulating such markets.
Sidley is consistently ranked by Thomson Financial as one of the top counsels in public and private REIT securities offerings. These rankings recognize a tradition of consistent leadership by Sidley in the REIT area.
We have actively participated in organizing, advising and financing REITs for more than 30 years and have been involved in the IPOs of dozens of REITs, both equity and mortgage/specialty finance. We have worked with REITs focusing on various property types, including retail, office, industrial, hotel, healthcare, residential, mall, outlet and student housing, giving us insight into the particular issues with regard to these asset types.
We have substantial experience in a wide variety of other REIT securities offerings, including at-the-market (ATM) equity programs, forward equity transactions, Rule 144A initial offerings of common stock, operating partnership units, convertible preferred stock, convertible/exchangeable debt, high yield debt, remarketed/extendible debt and warrants. This work requires not only an extensive knowledge of the Securities Act of 1933 and the related rules, but also a well-developed understanding of marketplace standards and practices particular to REITs.
Financial Services Firms
Sidley provides general corporate representation to a broad range of participants in the financial services and asset management industries, including investment advisers, broker-dealers, commodity pool operators, commodity trading advisors and futures commission merchants.
We advise clients on the formation and structuring of their businesses, internal governance, registration and other regulatory matters, marketing of their products, acquisitions and investments, internet issues, intellectual property protection, arrangements with various service providers and tax and estate planning.
This area of our practice resembles a traditional corporate practice in that many of our non-institutional clients have very small or no internal legal departments and rely on our firm for their full range of legal needs.
In addition, we represent financial institutions in their roles as placement agents in connection with offerings of investment products.
We advise institutional investors, including state pension plans, funds of hedge funds, foreign investors (including foreign governmental entities), college endowments and corporate clients, in connection with their negotiated investments in private equity and venture capital funds, hedge funds and structured investment transactions.
Other Related Areas
Sidley represents securities, futures and options exchanges and clearing organizations in connection with every aspect of their operations, including obtaining regulatory approval of new products and innovative programs, such as cross-margining arrangements between securities and futures products and links with foreign exchanges. On behalf of our clients, we analyze complex financial products to determine whether such products can be recharacterized as insurance for regulatory purposes. We provide a full range of bank regulatory services to our domestic and international financial institution clients, including legal guidance regarding the permissibility and risk-based capital treatment of credit derivative structures.