Investment Management | Practices | Holland & Knight (2024)

Successfully managing investment funds in today’s economic environment requires the skills and oversight of seasoned legal professionals with proven experience. Holland & Knight’s Investment Management Team has a long history of representing clients in every aspect of fund formation and investment management transactions.

Our team counsels a wide range of clients, including investors, investment funds, investment companies, fund managers (including registered investment advisers), private money managers, investment management divisions of banks and their trust and investment departments (including their collective and common trust funds), broker-dealers and other institutional investors. We have extensive experience with all varieties of investment funds, including United States hedge funds; Cayman Islands, Bermuda and other offshore hedge funds; private equity and venture capital funds; open-end and closed-end mutual funds; registered hedge funds; real estate funds; funds of funds and group trusts.

We combine experience, insight and creativity to deliver well-informed advice on all aspects of investment management, including:

• fund formation, operation and management
• regulatory compliance and enforcement
• fund mergers and acquisitions, liquidations and other restructurings
• data security and privacy
• Office of Foreign Assets Control (OFAC) requirements
• private equity, venture capital, real estate funds, mutual funds, common and collective trust funds
• disclosure requirements
• fund distribution arrangements
• broker-dealer matters
• new and innovative investment products
• cross-border and international investment
• tax implications

Private Funds

Our team has extensive experience structuring and organizing private investment funds, including onshore and offshore hedge funds, venture capital funds, private equity and leveraged buyout funds, funds focused on particular foreign countries or markets, specialized real estate funds and funds of funds. We regularly assist clients with:

• structural issues
• drafting or reviewing a fund's term sheet, private placement memorandum, partnership agreement and operating agreement
• preparing the investor subscription agreement
• advising on applicable federal and state securities laws
• forming alternative investment vehicles
• negotiating with investors' counsel
• drafting or reviewing fund contracts with service providers
• assisting with investor correspondence
• restructuring or renegotiating documentation
• conducting legal due diligence and risk mitigation analysis
• structuring “master/feeder” arrangements

For offshore funds, we evaluate the location and tax implications for investors, investments and advisers to help the sponsor determine the optimal jurisdiction for fund organization, the need for multiple entities or tiers and the appropriate service providers.

We also have experience representing private investment funds in start-up, growth stage and turn-around venture capital and other equity investments; leveraged acquisition and recapitalization transactions; and sales, redemptions and other divesture and liquidity transactions.

Investment Advisers

We have advised numerous domestic and non-U.S. investment advisers in all aspects of fiduciary and regulatory issues under both the Investment Advisers Act of 1940 and applicable state law. Our practice includes forming investment advisers, advising investment advisers on issues concerning the need to register with the Securities and Exchange Commission (SEC) or applicable states and assisting with such registrations. In addition, we assist with investment management contracts, SEC and state filings, disclosure documents, referral arrangements, audits and enforcement proceedings, compliance and supervisory procedures, pension rules, custody rules, brokerage, trading and soft dollar matters, wrap accounts and investment performance advertising and marketing issues.

We represent clients of all sizes, from investment advisory divisions of large U.S. banks and multinational financial institutions to smaller, independent registered and private investment advisers. Regardless of their size, our commitment to every client is the same – to provide strategic, effective advice that meets all of your investment management needs.

Mutual Funds

Our team has organized and represented investment companies registered under the Investment Company Act of 1940. We can assist you with:

• complex fund structures
• drafting and updating registration statements and prospectuses
• drafting fund contracts with service providers
• responding to ongoing marketing, regulatory and compliance issues
• advising on SEC filing and disclosure requirements
• attending quarterly and special board of directors meetings
• guiding directors through fiduciary and regulatory matters
• representing mutual fund advisers on matters specific to their investment company business

International Financial Regulations

Holland & Knight guides financial services institutions through the legal intricacies of global operations. Our attorneys understand the benefits as well as the risks associated with international financial regulations. We assist clients that wish to expand their market shares by helping with structuring their international operations in a way that minimizes risks and maximizes efficiencies. Further, by working with counsel in more than 100 jurisdictions across the globe, we provide important analysis of international regulatory developments in order to assist clients with understanding and complying with local restrictions and requirements, such as local authorizations, tax regulations, labor and employment laws, securities and insurance licensing, privacy and data protection requirements, and other local regulations.

Broker-Dealers

We have advised many broker-dealers through the registration process and the development and implementation of internal compliance support systems mandated by industry regulators, including written supervisory procedures, trade procedures, internal exception reporting and Office of Supervisory Jurisdiction (OSJ) and branch office inspection procedures.

We can provide you with regulatory compliance advice on matters including:

• customer agreements
• advertising and sales literature
• soft dollar analysis
• noncash compensation rules
• variable product rules
• variable product sales
• personnel trading limitations
• books and records maintenance
• Form BD disclosure
• disciplinary event reporting
• regulatory element needs analysis and training programs
• online trading
• blue sky laws
• rule interpretations
• SEC no-action requests
• Form U-5 filings
• audit preparation and response

Common and Collective Trust Funds

Our investment management attorneys have extensive experience representing common trust funds for fiduciary accounts and collective trust funds for tax-qualified retirement plans. We can assist you with:

• establishing, merging and closing common and collective trust funds
• converting common and collective trust funds into mutual funds
• drafting trust documents and analyzing qualification requirements for assets that may be invested in them

In addition, we offer comprehensive advice on compliance with the federal tax, securities, pension and banking laws and state fiduciary laws that form the basis for these products' tax-free status and exemption from SEC registration.

ERISA (U.S. Pension Law)

Whether you are an investment fund, investment adviser or pension plan client, our ERISA lawyers can advise you on a range of issues arising under ERISA law and related provisions of the Internal Revenue Code, including fiduciary responsibilities under ERISA, the nature of prohibited transactions, the various ERISA regulatory exemptions, the use of ERISA "plan assets," the requirements of the venture capital operating company (VCOC) and the real estate operating company (REOC) exemptions.

Domestic and Foreign Tax

Our attorneys regularly handle complex tax issues that arise during the formation and operation of mutual funds. We work in collaboration with your management, accountants and auditing firms to address the tax implications in a cohesive, coordinated manner. Our team is well-versed in:

• partnership tax and allocation rules that are used in creating and drafting fund documents and tax-efficient arrangements for their principals
• rules applicable to and structures for addressing issues of particular concern to investors
• unrelated business taxable income (UBTI) rules of concern to pension funds and other tax-exempt organizations
• income rules of particular relevance to non-U.S. investors in U.S. funds
• special rules relevant to U.S. investors in funds that make non-U.S. investments, including passive foreign investment companies (PFICs) and controlled foreign corporation (CFC) rules

We use our knowledge of these rules, along with our understanding of the tax rules in the investee jurisdiction and applicable tax treaties, to create structures intended to optimize international tax results. We also have substantial experience with regulated investment company rules and other rules that govern investments in U.S. mutual funds, as well as the PFIC rules that govern the treatment of U.S. investors in offshore funds.

SEC/FINRA Enforcement Group

With a team that includes a former SEC Regional Trial Counsel and more than a dozen former federal prosecutors, including the former deputy chief of staff to the attorney general of the United States, we have extensive experience conducting and handling securities investigations, including criminal investigations by the Department of Justice, civil investigations by the SEC and investigations by FINRA. We are committed to providing efficient and informed representation and regularly assist clients with all phases of securities enforcement matters, including informal and formal investigations; testimony; Wells Submissions; negotiated resolutions and trial of administrative, civil and criminal proceedings.

We regularly collaborate with other Holland & Knight lawyers who concentrate on investment management issues and regulatory compliance by broker-dealers and registered investment advisers and, together, we have successfully defended clients in investigations and enforcement actions involving "hot button" SEC and FINRA enforcement issues, including:

• anti money laundering, KYC/CIP and SAR issues
• market timing of mutual funds
• insider trading
• revenue recognition by public companies
• municipal consultants
• mutual fund revenue sharing
• net capital and customer protection issues
• Rule 10b-10 confirmation issues
• advances by hedge funds to their affiliated investment advisers
• related-party transactions by public companies
• aiding and abetting liability of contra parties
• accounting for loss reserves and asset impairment by a public company
• Ponzi schemes

Customer Disputes

Our Investment Management Team regularly represents brokerage firms, registered representatives, financial planners and investment advisers in securities arbitrations by FINRA, NYSE, AMEX, CFTC, NFA and AAA.

We have litigated and arbitrated cases on behalf of brokerage firms, mutual fund companies and other financial institutions involving claims of fraud, churning, suitability, negligence, negligent supervision, market manipulation, order failures, Reg T violations, unauthorized trading, wrongful termination, defamation, breach of non-compete covenants and tortious interference claims. In addition, we have handled cases involving a variety of securities, including stocks, options, commodities, bonds, derivatives, limited partnerships, mutual funds, collateralized mortgage obligations and annuities.

Our arbitration experience includes both pre-arbitration and post-arbitration proceedings in state and federal courts; the enforcement of arbitration agreements or status quo injunctions; and the confirmation, modification or vacation of arbitration awards.

Institutional Investor Representation

Our clients include a range of different institutional investors, endowments, pension funds, trusts and other investors for whom we review and analyze documentation for all manner of fund investments.

Derivatives and Other Capital Markets Transactions

Members of our team have diverse experience working with hedge funds, mutual funds, pension plans and other capital markets participants in connection with all manner of derivative transactions (including swaps, options, swaptions, forwards, caps, collars and floors) used to hedge or speculate with respect to interest rate, currency, credit, equity, commodity and weather-related risk. In addition, we have worked with hedge funds and investors to structure investments by hedge fund investors through derivative instruments or otherwise in lieu of traditional purchases of hedge fund interests. We also have knowledge and direct experience with repurchase agreements, securities lending agreements and similar transactions relevant to obtaining leverage, controlling lending risk, enhancing portfolio returns and facilitating trading activity.

With backgrounds that include private and in-house legal experience, service on the business side of capital markets desks and government agency work, our team is skilled in both creating new capital markets products and applying existing capital markets products in novel ways.

Team Approach Provides Comprehensive Counsel

Our team has the advantage of drawing from the experience of other lawyers in the firm on an as-needed basis to identify and solve specific legal issues that can impact investment transactions, including environmental, tax, ERISA, labor and employment and government regulatory matters. Working with these lawyers, we are able to provide the comprehensive advice and protection you need to successfully manage investments in today’s global marketplace.

Guidance You Can Trust

When you seek counsel from our Investment Management Team, you work with attorneys who not only possess a thorough understanding of the law but also have strong industry-wide working relationships. In addition, you partner with a team that demonstrates the highest standard of client service — the first priority of every practice at Holland & Knight. This is why we are consistently recognized to be leaders in the field by national and international publications, including The Best Lawyers in America guide, Private Funds/Hedge Funds Law; Legal Media Group’s Expert Guides, World’s Leading Investment Funds Lawyer; Chambers USA – America’s Leading Business Lawyers guide, Corporate/M&A: Private Equity; Chambers USA – America’s Leading Business Lawyers guide, Corporate/M&A: Hedge Funds; and Chambers Global – The World’s Leading Lawyers for Business guide, Investment Funds: Hedge Funds.