Baker Botts’ Investment Funds Practice combines traditional strengths of the firm with significant experience in the alternative investment space. We regularly advise investors in and sponsors of the full gamut of alternative investments, including hedge funds, private equity and real estate funds, separate accounts, and custom products. We advise investment firms on regulatory compliance, structuring of principal ownership and employee participation, and third-party financing of sponsor capital. We advise on transactions involving the acquisition, disposition, or liquidation of investment firms, investment funds, or interests therein. And we have been involved in resolving a variety of disputes in the alternative investment arena through both settlement and litigation or arbitration.
Baker Botts works with leveraged buyout funds, energy and other sector funds, real estate funds, hedge funds, funds of funds, venture capital funds, and family offices. We structure funds to accommodate the needs of all types of investors, including corporate pension plans, state and local pension plans, sovereign wealth funds, foundations, university endowments, bank holding companies, insurance companies, and individuals. We are attuned to the requirements of non-U.S. investors seeking to invest in the United States, U.S. investors seeking to invest outside the United States, and fund sponsors seeking to combine U.S. and non-U.S. investors in a single investment program targeting any number of jurisdictions.
Baker Botts’ long-standing and wide-ranging experience in the global energy business has led us to a particular expertise in energy funds covering a broad array of energy businesses. Among others, we have worked on funds focused on oil and gas exploration and development, natural gas, natural gas liquids and crude oil gathering, processing, and transport, electricity transmission and distribution, and renewable energy projects.
Real Estate Funds
We have structured and formed numerous funds and other alternative investment vehicles targeting real estate investment in the United States, Canada, Western Europe, Mexico, Brazil, Russia, India, and China with core, value-add, opportunistic, and mixed investment strategies. The fund structures we create often include real estate investments trusts (REITs), and fund investment activity on which we advise often includes the acquisition or disposition of REIT interests.
We have represented hedge fund sponsors in connection with fund structuring, formation, and documentation for domestic and offshore hedge funds employing a variety of different investment strategies, including long-short equity, multi-strategy, global macro, fund of funds, industry sector funds, and region-specific funds. We have assisted hedge fund managers in a range of business ventures, such as the negotiation of seed capital arrangements, the structuring of cross-border activities to achieve internal control and regulatory and tax efficiencies, and acquisitions of new investment strategies through employment, business acquisition, and joint ventures. We assist our clients in structuring and documenting derivatives transactions and have assisted in the establishment of prime brokerage and other trading relationships.
International and Emerging Markets
Our lawyers have extensive experience with forming and investing in, and the investment activity of, funds targeting developed, emerging, and frontier markets, including Russia and other states of the former Soviet Union, the Middle East, and Africa. This experience includes in-bound investment by funds and investors from other regions, as well as locally organized investment vehicles. We are also familiar with the preferences and practices of investors from Russia and the Middle East making out-bound investments and the local regulatory regimes governing the solicitation of these investors.
We advise numerous U.S. and non-U.S. institutional investors, including state pension plans, corporate pension plans, funds of funds, and other corporate investors in connection with their investments into private investment funds around the world across a variety of strategies, including hedge funds, private equity funds, real estate funds, venture capital funds, mezzanine funds, energy funds, credit funds, funds of funds, and hybrid funds. In addition, we represent our investor-side clients in connection with the negotiation of strategic relationships, “funds of one,” co-investment arrangements, and seed and anchor transactions, as well as in private secondary market transactions involving auctions, structured transactions, tender offers, and one-off sales.
We advise investment management firms on the regulatory issues governing their business, including those related to raising capital. We are often called on to analyze a client’s investment portfolio to determine whether the client is required to register under the Investment Advisers Act. We help design and implement compliance programs for newly registered investment advisers and assist clients with ongoing compliance issues and SEC and FINRA inspections.
We advise our investment management clients on evolving regulations such as Dodd-Frank, the JOBS Act, and FATCA, as well as the range of regulatory regimes to which they and their sponsored funds may be subject, including the Investment Company Act, ERISA, the Bank Holding Company Act, the FCPA, CFIUS, and anti-money laundering and anti-terrorism legislation and regulations. Our lawyers routinely deal with regulatory and other issues that arise in connection with investments in futures and commodity relates investments.
We assist our alternative investment clients in the resolution and avoidance of disputes and potential disputes, including disputes over compensation, indemnification, fund manager removal, and employee or principal separation. We represent our clients before the SEC, FINRA, and the CTFC. We believe we are particularly adept at dealing with regulatory inquiries in a manner that avoids or minimizes formal regulatory action. On several occasions we have been appointed to represent the liquidator of a fund being liquidated as part of the resolution of a dispute.