Intro to Private Equity Funds

Series Overview

Host: Genevieve Antono, co-president of HELB
Purpose: Beginner's Guide to Corporate Practice
Audience: 2Ls preparing for on-campus interviews, 1Ls exploring corporate practice
Upcoming Topics: Intro to capital markets, M&A, hedge funds, etc.

Topic: Introduction to Private Equity Funds
Speakers: Maya Reeves, Nathalie Harand, Michael Walitzer from Simpson Thacher
Firm Overview: Simpson Thacher & Bartlett LLP (STB)
- Leading legal advisor in private equity sector
- Numerous awards (Chambers Global Band 1, Law 360, top law firm in PE deals)

Nathalie Harand
- Third-year associate
- Education: NYU Law, Duke Undergrad
- Chose Simpson for the people and substantive experiences
- Fun Fact: Has four sisters
Maya Reeves
- Fourth-year associate
- Education: Columbia Law, University of Michigan
- SEO intern and chose Simpson for its culture and people
- Fun Fact: Big Ed Sheeran fan
Michael Walitzer
- Head of the firm's Investment Funds Practice
- Education: Duke, Columbia Law
- Chose Simpson for its top-ranked corporate practice
- Fun Fact: Regular yoga practitioner, including headstands

Part of asset management along with mutual funds and hedge funds
Focus: High net worth individuals seeking to grow money without direct management
Types: Buyout, Real Estate, Debt/Credit, Mezzanine, Secondary, Opportunistic
Characteristics: Illiquid, long-term investment, sponsor-managed
Investor Types: U.S./non-U.S. institutional investors, sovereign wealth funds, pension funds, endowments, family offices, high net worth individuals

Legal Entities: Typically limited partnerships set up in Delaware, Cayman Islands, or Luxembourg
Players: Fund sponsor (GP, manager), Limited Partners (investors)
Fees: Management fees (1-2%), Carried interest (20% subject to hurdle/clawback)
Key Terms: Return on invested capital, Just-in-time funding, Recycling profits, Closed-ended funds, Transfer restrictions, Subscription periods

Hierarchy: Sponsor, General Partner (GP), Investment Advisor, Main Fund, Parallel Funds, Co-investment vehicles
Typical jurisdictions: Delaware, Cayman Islands, Luxembourg, with variations for regulatory/tax reasons

Fundraising: Preparation of offering documents, due diligence, negotiation with investors
Investing: Sponsor uses capital to make investments
Managing: Improving acquired businesses/assets
Exiting: Selling investments and distributing profits
Closure: Remaining capital distributed, fund dissolved

Buyout Funds: Control stakes in private/public companies
Real Estate Funds: Investments in real property
Infrastructure Funds: Investments in infrastructure assets
Tactical Opportunity Funds: Opportunistic investments
Debt Funds: Non-controlling debt investments
Hedge Funds: Publicly traded stocks and bonds
Open-ended Real Estate Funds: Long-term stable real estate assets
Registered Funds: Publicly traded and regulated
Other Types: VC, Hybrid, Secondary, Fund of Funds, Co-investment, Minority stakes

Securities Act of 1933: Registration exemptions (Reg D, Reg S), Accredited investor requirements
Investment Company Act of 1940: Exemptions (3c7, 3c1), Qualified Purchasers
Investment Advisors Act of 1940: SEC registration, fiduciary duties
Securities Exchange Act of 1934: Limits on number of investors
CFTC: De minimis exemptions
ERISA: Retirement asset regulations
Tax Considerations: Partnership treatment, blocker entities
Global Compliance: Local and international regulatory compliance (AIFMD, Blue Sky)

Investor Contact: Guiding through subscription process, reviewing documents
Drafting: Side letters, sections of PPM and LPA, legal opinions
Coordination: Working with various teams (Tax, ERISA, regulatory)
Tracking and Organizing: Keeping updated checklists, closing communications, assisting with transfers
Unique Opportunities: Interaction with multiple practice groups (M&A, real estate, credit)

Key Skills: Drafting, negotiation, client counseling
Recommendation: Email STB recruiting at legalrecruiting@stblaw.com for more information or to express interest