Fund Structuring Lawyers Worldwide.

A Fund Structuring lawyer acts as the architect of your investment vehicle. They do not just write contracts; they design the legal entity that connects your strategy to your capital. Their job is to ensure the fund can legally accept money from specific types of investors, such as US tax-exempt pension funds or foreign nationals. By building the right structure, they minimize tax leakage and ensure that regulatory roadblocks do not stop you from deploying capital.

A Master-Feeder structure solves a specific problem: mixing different types of investors in one pot. You create separate “feeder” funds for US taxable investors and foreign or tax-exempt investors. These feeders pour all their cash into a single “master” fund where the actual trading happens. This allows you to manage one portfolio while keeping the tax treatment separate for each group. It reduces administrative costs and creates a larger pool of assets, which often helps in negotiating better rates with banks.

Your choice of domicile depends entirely on who your investors are. If you are targeting US clients, Delaware is the standard choice due to its predictable legal system; over 66% of Fortune 500 companies are incorporated there for this reason. If you have European investors, Luxembourg offers a “passport” to market across the EU. A lawyer analyzes your target audience and asset class to pick the jurisdiction that offers the least friction for raising capital.

The difference comes down to liquidity. An open-ended fund, like a hedge fund, allows investors to redeem their shares and cash out at regular intervals. A closed-ended fund, common in Private Equity, locks up the money for a fixed period, often 10 years. A lawyer structures the “redemption rights” to match the assets. You cannot have an open-ended structure if you are buying illiquid assets like real estate, or you will face a liquidity crisis when investors ask for their money back.

Carried interest is the performance fee earned by the fund manager. A lawyer structures this so it is treated as long-term capital gains rather than ordinary income. This can significantly reduce the tax rate in the US and UK. They draft the partnership agreements to ensure you meet specific “holding period” requirements. This legal structuring ensures that your hard-earned performance fees are not taxed at the highest possible income bracket.

The General Partner runs the show and bears unlimited liability. They make all investment decisions and manage the daily operations. The Limited Partners provide the cash but have no say in management. This passivity is legally required; if an LP starts making business decisions, they risk losing their “limited liability” status. A lawyer defines these roles clearly in the agreement to protect the LPs from being sued for the fund’s debts.

Yes, the LPA is the constitution of your fund. It dictates everything from management fees to “key person” clauses, which decide what happens if you get hit by a bus. Institutional investors will not sign a standard template. They demand specific protections. A lawyer negotiates these terms to ensure you have the flexibility to operate while satisfying the strict governance requirements of large institutional backers.

The Alternative Investment Fund Managers Directive (AIFMD) is the strict rulebook for managing alternative funds in the EU. It imposes heavy compliance regarding capital requirements, risk management, and reporting. If you want to market to European investors, you generally must comply. A lawyer helps you navigate this by either setting up a fully compliant EU-based manager or using “National Private Placement Regimes” to sell to specific countries without triggering the full weight of the directive.