Strictly Business

A Business Law Blog for Entrepreneurs, Startups, Venture Capital, and the Private Fund Industry.

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Private Fund Archives

Handling Trade Errors: Best Practices for Private Fund Advisers

May 15, 2019 by Patricia Alcamo

trade error

New investment advisers are typically focused on creating marketable investment programs and raising capital. Legal matters are often delegated to outside counsel and the adviser’s investment in operations, staffing and compliance is often kept at a minimum to start. While this strategy may make sense on a budgetary level, new advisers need to devote some attention to inevitable operational issues in order to minimize their cost and disruption. At the top of this list is the issue of trade errors.

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Filed Under: Private Equity and Hedge Funds Tagged With: Investment Adviser, PF Recent, Private Fund, Recent, trade error

Intro to Private Equity Funds

February 19, 2018 by Alexander J. Davie

private equity fundA private equity fund is an investment entity formed by an investment adviser (often also referred to as a fund manager or sponsor), that raises capital from investors to make investments in private companies under a specified investment strategy. Typically, the investors commit to investing a certain amount of capital over time, in one or more capital calls made over the course of the private equity fund’s life cycle. The investors are passive and do not participate in the management of the fund or the selection of its investments. The fund manager is responsible for investing the assets pursuant to the fund’s investment strategy. Additionally, private equity funds are often “blind” (in that the investor does not know in advance what their money will be invested in) and anonymous (in that no investor knows the identities of the other investors). [Read more…]

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Filed Under: Private Equity and Hedge Funds Tagged With: Investment Adviser, PF Recent, Private Equity Fund, Private Fund, Recent

Accredited Investors vs. Qualified Clients vs. Qualified Purchasers: Understanding Investor Qualifications

August 17, 2017 by Alexander J. Davie

image of a number of investors interesting in a productPrivate funds, such as hedge funds, private equity funds, and venture capital funds, are governed by a host of intersecting federal laws that impact who can invest in these fund, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Investment Company Act of 1940. This post provides prospective and existing private fund managers with a basic understanding of the primary categories of investors and why understanding these categories is essential in structuring and marketing a fund.

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Filed Under: Private Equity and Hedge Funds Tagged With: Accredited Investor, Hedge Fund, PF Recent, Private Equity Fund, Private Fund, Qualified Client, Qualified Purchaser, Recent, Venture Capital Fund

Guide to Starting a Hedge Fund

March 28, 2017 by Alexander J. Davie

starting a hedge fundAs an investment manager looking into starting a hedge fund, you know that a successful launch is critical to standing out in the increasingly competitive investment management business. If you want to attract capital from the right investors, you must put in place the right team and structure for your new fund. Discounting the legal and regulatory complexity involved with forming a hedge fund or trying to wear too many hats could lead to early mistakes that stifle momentum and are expensive to fix. This post describes some key considerations for aspiring hedge fund managers who are contemplating the formation of a new fund.

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Filed Under: Private Equity and Hedge Funds Tagged With: Hedge Fund, Investment Adviser, PF Recent, Private Fund, Recent

SEC Enforcement Division’s Asset Management Unit’s Chief Anticipates Increase in Private Equity Enforcement

February 14, 2013 by Alexander J. Davie

Bruce Karpati, the Chief of the SEC Enforcement Division’s Asset Management Unit, held a Q&A session entitled “Private Equity Enforcement Concerns” at the Private Equity International Conference held in New York on January 23, 2013. He addressed private equity firm activities of concern, how the SEC is tracking those activities, and ways firms can avoid getting into trouble. [Read more…]

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Filed Under: Private Equity and Hedge Funds Tagged With: Fiduciary Duty, Investment Adviser, Private Equity, Private Fund, SEC, SEC enforcement, Securities, Securities Law Violations

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About the editor

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Strictly Business is a business law blog for entrepreneurs, startups, venture capital, and the private fund industry. Its editor is Alexander J. Davie, an attorney at Riggs Davie PLC based in Nashville, Tennessee. His practice focuses on corporate, securities, and business law. He works mainly with technology companies, including startups and emerging companies, and private equity, venture capital, and hedge funds.
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