Investment Funds / Investment Management / PE Forum

[Anonymous User]

I'm headed to NY biglaw at a chambers "top" investment funds practice and hoping to learn more about the work..
I understand generally what the practice area consists of (fund formation, fundraising/fund marketing, fund compliance, etc.), but could someone share any insight into the day to day of a junior associate within a funds group? If possible, the responsibilities of more senior associates as well? Anything on lifestyle/pace of the practice would also be great. I checked out the "Lawyers: What's Your Typical Day?" thread with no success.
Thanks a lot.

[BenJ]

Would be glad to discuss. PM me.

[Anonymous User]

The day to day is 100% secretarial work.

[Anonymous User]

Interested as well. Would also appreciate CA perspectives if they're available (is work stressful, exit options, etc.). Thanks in advance!

[Anonymous User]

Interested as well. Would also appreciate CA perspectives if they're available (is work stressful, exit options, etc.). Thanks in advance!

I can speak to venture fund formation work in NorCal. It's like a mix of securities/tax law. This is probably one of the better corporate practices to be in for work/life balance. Hours are pretty predictable given the nature of the work. Exit options aren't great because the work is pretty specialized. I guess you would just go into a VC firm.

[Anonymous User]

Interested as well. Would also appreciate CA perspectives if they're available (is work stressful, exit options, etc.). Thanks in advance!

I can speak to venture fund formation work in NorCal. It's like a mix of securities/tax law. This is probably one of the better corporate practices to be in for work/life balance. Hours are pretty predictable given the nature of the work. Exit options aren't great because the work is pretty specialized. I guess you would just go into a VC firm.

Thanks for your insight! I'd be more than happy to exit to a VC firm, are those types of exits relatively attainable? And do you know if the same applies for lawyers experienced in other types of funds (registered, PE, hedge funds)?

[Tiny Rick!]

Fund formation is a highly specialized practice with little applicability outside the given field. You're working on structuring investment vehicles through LP or LLC agreements, which set out the relationships among a truly Byzantine network of funds, fund managers and limited partners. There are a ton of ancillary documents that go along with the main LP/LLC agreements, e.g. subscription agreements, side letters, powers of attorney and offering memoranda and other marketing materials. There are also regulatory questions which center around the Investment Company Act of 1940 and the Investment Advisors Act of 1940, in addition to general securities regulation issues and ERISA.

The learning curve is probably a bit steeper than something like M&A because distribution waterfalls, carried interest provisions, clawbacks, etc can be extremely complicated. The higher up you go the more likely you'll be to negotiate primary documents and advise fund managers on structuring issues. You'll also be drafting a lot of LP/LLC agreements and the ancillary docs I mentioned.

Juniors do things like investor questionnaires, board resolutions, research regulatory questions, gather signature pages and keep checklists, which is secrtarial bitch work like most first-year work is. The difference is that exit options tend to concentrate more into other firms and in-house fund work, because where else is someone going to need fund formation expertise? Making a transition to a general in-house role would probably have to be sold as you being an excellent drafter and having great general investment/finance/business strategy knowledge - whereas an M&A attorney would be much closer to business operations issues and a capital markets attorney would have a lot more experience with annual reporting and securities work that might translate easier at a larger corporation.

I would think of it as a fairly specialized practice, but if you enjoy the work then it could be a good career move so long as you're willing to stay in biglaw or funds work, and god willing Trump doesn't get rid of carried interest.

If you're going to a top NYC funds group the hours will not be reasonable, but like no worse than your other corporate counterparts. Maybe a little better because closings are fewer and farther between and maybe a bit steadier. But you'll still be working a lot.

[Anonymous User]

Fund formation is a highly specialized practice with little applicability outside the given field. You're working on structuring investment vehicles through LP or LLC agreements, which set out the relationships among a truly Byzantine network of funds, fund managers and limited partners. There are a ton of ancillary documents that go along with the main LP/LLC agreements, e.g. subscription agreements, side letters, powers of attorney and offering memoranda and other marketing materials. There are also regulatory questions which center around the Investment Company Act of 1940 and the Investment Advisors Act of 1940, in addition to general securities regulation issues and ERISA.

The learning curve is probably a bit steeper than something like M&A because distribution waterfalls, carried interest provisions, clawbacks, etc can be extremely complicated. The higher up you go the more likely you'll be to negotiate primary documents and advise fund managers on structuring issues. You'll also be drafting a lot of LP/LLC agreements and the ancillary docs I mentioned.

Juniors do things like investor questionnaires, board resolutions, research regulatory questions, gather signature pages and keep checklists, which is secrtarial bitch work like most first-year work is. The difference is that exit options tend to concentrate more into other firms and in-house fund work, because where else is someone going to need fund formation expertise? Making a transition to a general in-house role would probably have to be sold as you being an excellent drafter and having great general investment/finance/business strategy knowledge - whereas an M&A attorney would be much closer to business operations issues and a capital markets attorney would have a lot more experience with annual reporting and securities work that might translate easier at a larger corporation.

I would think of it as a fairly specialized practice, but if you enjoy the work then it could be a good career move so long as you're willing to stay in biglaw or funds work, and god willing Trump doesn't get rid of carried interest.

If you're going to a top NYC funds group the hours will not be reasonable, but like no worse than your other corporate counterparts. Maybe a little better because closings are fewer and farther between and maybe a bit steadier. But you'll still be working a lot.

This was awesome insight. Thank you.
Do firms like Debevoise/K&E/STB dominate market share for all types of investment funds (hedge funds, PE funds, VC funds, etc.)? Or do those firms tend to solely service PE shops, while places like Cooley/Goodwin/WSGR focus on VC clients, etc. ?
Also, you mentioned drafting. Does one tend to get drafting experience early-on (largely because, as you mentioned, there are so many ancillary documents, and bc there isn't much diligence work like there is in M&A)?

[Tiny Rick!]

The three firms you mentioned obviously dominate fund formation, especially PE work. The west coast players you mentioned do more VC work. I'm not as familiar with that space, although I've heard it's a bit more rote and standardized than PE work - since early stage businesses don't have as much complexity to them. You're really not going to get drafting experience early on anywhere. This is for a simple reason: you don't know dick about drafting. The most you can do is take a precedent doc and then make changes that seem favorable to your side. But you'll have no idea re: the relative importance of provisions, what you're willing to give up to give up, and how things flow through to other documents. Also it will take you ten times as long as mid-levels. That's why you start off marking up NDAs, drafting board resolutions and offering memoranda at first, because these are the least important documents.

If anyone tells you you're going to get early drafting experience, they are lying, or playing off your overblown expectations about what "drafting" actually means. You've gotta crawl for at least a year or two before you can crawl a little better

Just want to mention that I'm not a funds lawyer, by the way.

[jingosaur]

Does anyone have experience on the regulatory side of IM law? Is it something first years can get experience with or is it really just for people with lots of experience in the field.

[Mozart Lacrimosa]

Bump.

[Anonymous User]

i started out as a funds lawyer before moving to another transactional practice. your days as a junior in a large funds groups will be similar to the days of other transactional people, with a few caveats:
--there is very little due diligence relative to M&A or other diligence-heavy practices.
--the hours are usually a little more predictable/stable than other transactional areas because closings usually don't have a hard cut off.
--funds documents are pretty specialized, and you are basically never going to see "corporate" docs. this is good and bad; good because LLCs are everywhere and general corporate people often get lost in operating agreements/waterfalls, and bad because you don't develop as many transferable skills.
--unlike general corporate/M&A people, funds lawyers actually do need to eventually develop some real legal knowledge. ideally this means some combo of regulatory compliance (advisors act), securities offering law ('33 act), tax (partnership tax, international tax), and the key exemptions from ERISA and the '40 act.
--exit opps are much more limited, as others have noted.

also, on the distinction between VC/PE/hedge - VC and PE funds are pretty similar mechanically, but PE funds tend to have more regulatory burdens (e.g., compliance with media company regulations). hedge funds still have similar legal considerations, but have significantly different mechanics.