The firm has developed a specialized practice representing institutional investors--pension plans, endowments and fund of funds--in their investment activities. As an example, our lawyers have developed an expertise in cost-effective legal due diligence to assist institutional investor clients in identifying areas of contractual, tax and fiduciary risks associated with potential investments in real estate, private equity and hedge funds, as well as direct ownership of investment real estate. This representation often involves analysis of complex investment structures designed to minimize or eliminate UBTI for tax-exempt investors, avoid Investment Company Act registration, avoid U.S. tax liability for foreign investors and reduce potential fiduciary and ERISA-related risks. Our representation in the context of a fund investment typically results in the negotiation of a side letter with the fund manager tailored to the client's needs.
We also have significant expertise in secondary transactions involving alternative investment funds, including funds investing in venture capital, private equity, real estate, real estate operating companies and natural resources. Our representation in this area is focused on establishing appropriate risk-sharing in the purchase and sale agreement and identifying and addressing contractual and other risks in the fund governing documents. We have a firm understanding of clawback distribution liability and other areas of exposure in holding these classes of assets, and how those liabilities are most appropriately apportioned between buyer and seller. We also have worked with numerous fund managers on their transfer and admission agreements for substitute investors. We strive to work efficiently with and respond promptly to other participants in these transactions, understanding that these transactions are time-sensitive and require multiple parties to coordinate their efforts in order to successfully close.
