Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 8 years ago
Seeding agreements: tax, legal and regulatory issues to consider when structuring seeding agreements
_______________________
Initial considerations
– Great variety of terms
– Seeding into fund/managed account or fund manager or both – what documents will be needed
– Companies House and FCA filings
– Be clear who the parties are
– Include detail on what will happen if terms are not met
____________________
Documentation
– Seeding Agreement
– Shareholders Agreement plus amended articles of association
– LLP Agreement
– Offering Memorandum
– Managed Account documents
____________________
Fees and Revenue
– Discount at fund level
– Shares of revenue at fund manager level
– Ratcheting up of fees
– Potential inclusion of new products
____________________
Equity share in fund manager
– Investment manager’s freedom to run the strategy
– Seeder’s input into running the business e.g: (a) corporate actions; (b) business advice; (c) office space; (d) marketing.
– Launch of additional products
____________________
Reduced fees from fund
– Separate share class
– Side letters
– Most Favoured Nations
– Treating customers fairly
– Any additional transparency issues
____________________
Non-compete and non-solicitation
– Prohibition on creating or joining a competing business
– Time period
– Other relevant staff
– Other capital
____________________
Control and the team
– Change of control
– Sale of investment manager
– Team loyal to investment manager
– Key personnel
____________________
Invested amount and capacity
– Where – fund or fund manager
– When – in tranches or at once
– Time period
– How much – agreed capacity, including in other products
– Capacity as a set figure or percentage of AUMCapacity withdrawals and re-availability
– Diversification of investors and redemption risks
____________________
Lock-up
– Length of time
– Breach events e.g.: (a) poor performance; (b) failure of investment manager to participate; (c) criminal or regulatory violations; (d)material breach of agreement.
– Notice period
– Total investment or percentage of AUM
____________________
Transparency and confidentiality
– Disclosure to other investors
– IP and strategy confidentiality and ownership
– FCA and side letters
– AIFMD
– Share classes
– Publically available information in the UK e.g.: (a) Companies House; (b) FCA register.
Cummings Law Ltd
42 Brook Street
London W1K 5DB
+44 20 7585 1406
posted 24 minutes ago
posted 21 hours ago
posted 21 hours ago
posted 21 hours ago
posted 2 days ago
posted 4 days ago
posted 4 days ago
posted 6 days ago
No results available
ResetFind the right Legal Expert for your business
Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.