Private Equity and Hedge Funds: Regulatory Analysis and Structural Overview

May 2012

At Fox Rothschild LLP, we have a wealth of experience in creating and forming private equity and hedge funds. Over the years, our strategy has been to work with our clients to develop these entities while also assisting them in their ongoing business operations. As a result of the breadth of our experience, we have produced this handbook as a reference guide for both those contemplating entering into this exciting field or those already in the business seeking a handy resource when a question arises.        

In an anticipation of your interest in these fund offerings, we wish to provide you with a summary of the most common compliance-related issues that private equity and/or hedge funds face. Of course, every issue is not covered that you may encounter in raising capital. Therefore, we suggest that you contact us with any question or concern if an issue should arise. Please keep in mind that any deviation from the current statutory and regulatory structure (primarily based in exemptions and exceptions to provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and the Investment Company Act of 1940) for your private equity or hedge fund could subject you and your associates to significant liability.        

This handbook has been prepared in two parts. The first part provides a summary of regulatory issues affecting hedge fund formation and operation. The second part contains a generic “Summary of Terms” of the type that would be incorporated within a typical private placement memorandum. In the “Summary of Terms,” we have tried to identify the types of issues that would be relevant for you as a start-up fund and as a baseline for discussion and modification.¹

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 ^{1This handbook has been prepared for internal use only as a generic summary guideline of the regulatory issues affecting private equity and hedge fund formation and operation. It has not been customized for the use of the recipient or to address any specific issues that may be particular to the recipient. This material, absent separate written confirmation by a Fox Rothschild attorney, is not to be relied upon as legal advice, an opinion of Fox Rothschild or as a current statement of the law. Further, this handbook remains the property of Fox Rothschild and is not to be reproduced or provided to any third party.}