INVESTMENT FUNDS An overview of our practice

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WHY CHOOSE DLA PIPER? Our UK Investment Funds Team is a full-service practice providing specialist, technically astute and pragmatic legal advice on all aspects of the investment funds and asset management worlds. We use our technical skills, global reach and extensive experience to provide practical and innovative advice to funds, their managers, their service providers and their investors. Specialist advice Our team comprises a group of highly qualified specialists, providing advice on fund formation, asset management and investor participations and all other aspects of the investment funds and asset management worlds. We are experts in our field. Our experience and expertise extends across the full range of investment vehicles, arrangements and asset classes, including: ■■

Private Equity

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Real Estate

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Hedge and other alternative strategies

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Infrastructure

Our core services, both in the UK and internationally, include: ■■

the structuring and establishment of fund and asset management businesses (including spin-outs)

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the structuring, establishment and promotion of investment funds of all types the establishment of segregated mandate or managed account arrangements the structuring and documentation of efficient fee and carry/promote arrangements the negotiation and documentation of investment management and advisory arrangements the negotiation and documentation of service provider relationships of all kinds (e.g. administration, custody, prime brokerage) all relevant financial services regulatory advice the review and negotiation of investor positions in new or existing funds the resolution of disputes between managers and their service providers, and between the manager and investors (from either perspective)

as well as more general services covering the wider business needs of funds and their managers, such as authorisation, licensing, outsourcing, borrowing and employment.

Practical and Innovative Solutions

Extensive experience

The expertise and experience of the DLA Piper UK Investment Funds Team, coupled with the global resources to which we have access, puts us in a unique position to help our clients achieve their objectives. We deliver a service which is not only technically excellent, but which is entirely focussed on delivering the most practical, efficient and commercially appropriate solution to the matter in hand. At times, this will mean providing a simple structure or agreement, but we pride ourselves on our ability to innovate – to create a bespoke product precisely tailored to our client’s needs.

Our team has helped a wide range of clients, including some of the biggest names in the investment sector, including: ■■

Aberdeen Asset Management

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Abu Dhabi Media Corporation

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ATP

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Bank of Ireland

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Better Capital

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Barclays Ventures

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Credit Suisse

Global reach

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Deutsche Bank

Our firm, the largest in the world, comprises 76 offices in 30 countries. This unparalleled geographic spread allows us to deliver fully integrated advice from fund specialists and other colleagues throughout the US, South America, Europe, the Middle East, Africa and Asia. We also have strong relationships with the top-ranked firms in all the major off-shore centres.

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European Investment Bank

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F&C Asset Management

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Future Films

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GE Equity

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Henderson Global Investors

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Invista Real Estate Investment Management

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Lanebridge Investment Management

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Matrix Securities

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Meinl Bank

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Met Capital Management

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National Employment Savings Trust

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Phoenix Group

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Pi Capital

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Pramerica Real Estate

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The Princes Trust

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Rockspring Property Investment Management

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Royal Bank of Scotland

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RPMI

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RREEF

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Scottish Widows Investment Partnership

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UBS

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Universities Superannuation Scheme

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Vespa Capital

“In late 2009, Better Capital Limited was established – a new, listed private equity fund investing through an underlying Guernsey limited partnership. With an innovative and previously unseen structure, we launched and closed, start to finish, in a total of only eight weeks. You can’t do that without fund lawyers who understand what the client wants and who set out to deliver that; who are current with the latest developments and structures in the international private equity arena; who are prepared to be innovative; who are experienced and highly competent, and who are responsive and deliver to time (in our case an extremely short time). DLA Piper met all of these criteria in full.” Gerard Lloyd, Better Capital

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Fund Formation We know how crucial sound fund formation advice is to capital raising and, alternatively, the success of the manager’s business. We take great pride in identifying the most suitable fund structure, and then implementing that structure in the most efficient manner possible. The key to successful fund formation is planning. We take pains to gather all relevant information as early as possible in the formation process, covering the manager’s commercial drivers, the likely needs of target investors and the general objectives of the scheme. Once complete, we draw on our extensive experience to devise the most suitable structure having regard to the needs of the manager and the investors. Having settled the structure, we will then draft or review and negotiate the key establishment documents. Our strong investment review practice gives us considerable insight into the changing demands of different types of investors and it is our aim to create documents which, when presented to investors, will require only minimal negotiation. Another aspect of fund formation is the appointment of various third party service providers. We believe in taking a robust, but commercial, approach to negotiations, working to achieve the best deal for the fund and its promoter having regard to the value of the arrangements in question. In terms of structures and vehicles, we are well acquainted with: ■■

onshore (English and Scottish) and offshore limited partnerships

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offshore companies

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unit and syndicate trusts

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cell structures, such as PCCs, ICCs and SPCs, in a variety of jurisdictions listed investment vehicles (including investment trusts, venture capital trusts and REITs) listed on the Main Market of the London Stock Exchange, AIM, the Irish Stock Exchange, the Cayman Islands Stock Exchange, the Channel Islands Stock Exchange and others

In recent years, we have been at the forefront of the development of “quasi-fund” vehicles – for example, joint ventures adopting a fund structure for the acquisition of identified pools of assets. We now have considerable experience of structuring, negotiating and implementing these arrangements between parties in numerous jurisdictions. Recent examples of the team’s experience include: Bank of Ireland – advising on the formation of the European Infrastructure Fund, which invests in infrastructure projects in the UK, Ireland and continental Europe. Better Capital – advising on the establishment of an innovative structure, comprising an AIM-listed feeder company and underlying Guernsey limited partnership, and on the vehicle’s subsequent transfer to the Main Market of the London Stock Exchange. Deutsche Bank – advising on the formation of numerous funds on the dbX hedge fund managed account platform. F&C Asset Management – advising on the formation of F&C’s institutionally-promoted European private equity capital fund of funds. Matrix Group – advising on the formation of a number of private equity and hedge funds. Rockpoint – advising on the formation of innovative LLP real estate structures. Rockspring Property Investment Management – advising on the restructuring of a pan-European fund. RREEF Limited – advising on the establishment of a secondary private equity/venture capital fund. Scottish Widows Investment Partnership – advising in respect of the Airport Industrial Property Fund, investing in airport related infrastructure and properties. Vespa Capital – advising on the formation of a novel Anglo-Luxembourg parallel fund structure for investment in private equity opportunities in France and the UK.

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Asset Management The DLA Piper UK Investment Funds Team provides full-service legal advice to investment managers operating in every sector. Our approach is simple – we listen to the manager’s needs and objectives and then work efficiently, drawing on experience and technical excellence, to meet those needs and deliver those objectives. For new or start-up managers we provide a highly accessible service, advising on structures, the tax efficient structuring of remuneration and all relevant regulatory matters, including handling applications for FSA authorisation. For established managers we provide a comprehensive service supporting the ongoing development of their business. For example, we have assisted numerous clients with amendments to their constitutions to reflect changes to the management team or to other circumstances. We have also helped guide managers through contractual issues of all kinds and issues arising with investors. We have also assisted with the expansion of management businesses into new product areas and, taking advantage of the global nature of DLA Piper, with the expansion into new markets (both into and out of the UK). Whether acting for new managers or old, we have extensive experience of documenting relationships. We have a great deal of expertise in the documentation and negotiation of all types of investment management and advisory mandates, whether a standard blind-pool type arrangement with a fund, a bespoke managed account or a one-off mandate for a specific investment. In addition, we have helped managers secure advantageous terms for their funds with third party service providers. In particular, we have led vigorous, but commercially sensitive, negotiations with fund administrators and custodians as well as with prime brokers and derivative counterparties, in each case using our experience and expertise to get the best result for our client.

Recent examples of the team’s experience include: ■■

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August Equity – reviewing the constitutional arrangements governing August Equity’s fund management vehicle and providing significant improvements in terms of internal governance and tax arrangements, creating a well balanced, bespoke, constitutional framework for their business. Desert Lion Partners – advising this new entity, which focuses on investment in Sierra Leone, on a range of regulatory and contractual structural matters relating to its funding and establishment. Met Capital Management – advising on the formation of a new hedge fund management entity including a number of related regulatory and contractual issues, and the creation of a novel trust structure. Northview Securities – advising on numerous prime brokerage and ISDA documents and connected issues. The Protected Capital Currency Management Company – advising the manager in respect of the successful replacement of the currency investment manager to the fund, a segregated portfolio company listed on the Cayman Islands Stock Exchange.

“DLA Piper advised Vespa Capital on the set up and launch of Vespa Capital’s first fund and continues to assist Vespa with Fund related legal issues as they arise. DLA Piper is very professional in its approach and always has time to dedicate to Vespa’s needs – you never get the feeling they are working on something else more important. They were smart, understood our requirements and worked with us to achieve the structure and solutions which we required. DLA Piper remain Vespa’s first port of call...” Megan Lester, Vespa Capital LLP

Aside from investment/asset management specific matters, we have access, through the wider DLA Piper firm, to specialists in every aspect of commercial legal advice, enabling us to provide advice on any legal issue affecting a management business, such as employment, outsourcing, tax, real estate and other matters.

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Regulatory Advice In recent years financial services regulation has been thrust into the public eye and now represents, more than ever, a constantly evolving landscape of rules and regulations – a minefield for the unwary. We are experts in navigating that minefield. Drawing on our experience and expertise, we provide clear and comprehensive legal advice on all UK regulatory matters affecting the investments funds sector including: ■■

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assessment of whether FSA authorisation is required and, if so, which permissions are appropriate handling the application process, including liaising with the FSA as required advising on all regulatory capital and conduct of business issues affecting FSA authorised firms advising on collective investment scheme issues, in particular in respect of often complex structured quasi-joint venture arrangements advising on prospectus and financial promotion issues in the context of product offerings assisting with preparation for FSA visits and inspections

Examples of our work include: ■■

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Better Capital – advising on the creation of an innovative regulatory structure, including structuring the provision of limited scope consultancy services on a non-authorised basis. Deutsche Bank – advising on numerous complex collective investment schemes and regulated activity issues in the context of a novel limited partnership structure proposed to be employed as a strategic structured product. Future Films – advising on various collective investment scheme and regulated activity issues relating to innovative products in the film finance sector. Lanebridge Investment Management – advising on various collective scheme issues, and regulated activity and advising on and documenting appointed representative arrangements. Met Capital – assisting with FSA authorisation process led by compliance consultants and subsequently advising on the creation of innovative trust and contractual arrangements designed to address certain regulatory features.

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UBS – assisting UBS with the implementation of regulatory changes affecting its suite of prime brokerage agreements. Vespa Capital – advising this new FSA authorised private equity fund manager on a variety of matters relating to its authorisation application and providing assistance with ongoing compliance matters.

We are also active in shaping the regulatory environment. Our lawyers are regularly called upon to comment on regulatory matters in both the industry and national press. For example, David Williams is a regular participant in working groups run by the Alternative Investment Management Association and has actively lobbied in Europe on the controversial Alternative Investment Fund Managers Directive, and on proposals for the regulation of short selling and certain aspects of credit default swaps, as proposed by the European Commission. Gawain Hughes has been prominent in deliberations on the Alternative Investment Fund Managers Directive. Gawain was the only private practice lawyer to be asked to contribute written and oral submissions to the House of Lords Committee looking at the impact of this very significant proposal.

Investor SERVICES Representing institutional investors and, in particular, the analysis and negotiation of investment terms, is an historic strength of our practice. We represent some of the world’s leading investors. Our aim is simple – to get the best deal for our client having regard to their commercial objectives. Acting for charities, pension funds and other institutions, we provide an efficient and highly knowledgeable service, providing our clients with first rate legal risk analysis backed by a sensitive but robust approach to the negotiation of investment terms. Our clients benefit from our deep understanding of market terms, covering issues such as fee and expense provisions, standards of manager liability and exoneration, manager removal and succession and exclusivity provisions. Our clients in this area are some of the world’s largest and most respected investors including: ■■

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Advanced Capital – we advised this Italian alternative investment boutique in connection with side letter arrangements relating to its investment in a major distressed assets fund. Barclays Bank/Royal Bank of Scotland – we advised, on short notice, these two major financial institutions on their investments into the Capital for Enterprise Fund, a UK government backed initiative to provide funding to small and medium enterprises around the UK. European Investment Bank – we have advised EIB on a significant investment in an established fund in the renewable energy sector. GE Equity – the team advised GE Equity on an investment in a major pan-European private equity fund. We were able to negotiate several beneficial terms for GE Equity, as well as providing them with a comprehensive legal risk analysis on the proposed investment. National Employment Savings Trust – we advised NEST on several unit linked insurance policies with a number of major insurers. Using our detailed knowledge of institutional investment matters, we were able to secure significant additional protections for this high profile client. Novartis – we advised the trustees of the Novartis pension scheme on the legal risks arising from a sizeable investment. We provided guidance as to the risks arising from the fund documentation, as well as

securing side-letter comfort and other amendments in negotiation with the fund’s counsel. ■■

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The Prince’s Trust – as part of our long-standing relationship with the Prince’s Trust, we advised this high profile charitable organisation on a number of potential investments in a variety of alternative investment funds. Universities Superannuation Scheme – we have advised USS, the second largest pension scheme in the UK, in relation to numerous real estate and private equity participations. Recently, the team has also advised on issues arising with its existing investment mandates.

Examples of funds we have reviewed: ■■

AllBlue Limited

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Blackstone/GSO Capital Solutions Overseas Fund L.P.

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Bridgepoint Europe IV LP

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Carlyle Partners V, L.P.

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Cazenove Absolute Return Trust for Charities

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Climate Change Capital Private Equity LP

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Coller International Partners V, L.P.

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Doughty Hanson & Co V L.P.

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Eclectica Credit Fund

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Fleming Family and Partners Global Property Fund

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HgCapital Renewable Power Partners 2

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Investec Funds Series III

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KKR Asian Fund L.P.

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Lazard Thematic Global Fund

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Macquarie Global Property Advisers Asia Fund III

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Morgan Stanley Eurozone Office Fund

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Ostara Japan Partnership II

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Pradera Central & Eastern Fund

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Pradera European Retail Fund 2

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ProLogis European Properties Fund II

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SWIP – The Airport Industrial Property Unit Trust

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The African Alliance Africa Pioneer Fund

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The Archstone German Fund

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The Unite Student Accommodation Fund

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Wellington Management Portfolios (Cayman) – Diversified Inflation Hedges Portfolio

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About us From the quality of our legal advice and business insight to the efficiency of our legal teams, we believe that when it comes to the way we serve and interact with our clients, everything matters. DLA Piper is an international legal practice with lawyers across Asia, Europe, the Middle East and the United States.

For more information To learn about DLA Piper, visit www.dlapiper.com or contact:

Gawain Hughes Partner T +44 (0)20 7796 6289 [email protected]

David A Williams Partner T +44 (0)20 7153 7799 [email protected]

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