On May 22, 2017, the U.S. Commodity Futures Trading Commission amended and supplemented several CFTC regulations to strengthen anti-retaliation protections for whistleblowers under the Commodity Exchange Act. These amendments, in general, make the CFTC’s whistleblower protections consistent with those afforded by Securities and Exchange Commission rules and reinforce the need for private fund managers that are registered as commodity pool operators or commodity trading advisors to take affirmative steps to avoid violating federal regulations regarding whistleblowing.

Click here to read more.

A proliferation of different fee levels and structures is evident throughout the alternative investment industry, and business development companies (BDCs) are no exception. For instance, management and incentive fees within the BDC space vary widely between issuers, with management fees ranging from as low as 1 percent to as high as 2 percent of gross assets. Throughout the industry, common drivers for revisiting existing fee structures include changing market norms and pressure from investors.

Click here to read this article in which partner John Mahon talks to The Hedge Fund Journal about new BDC fee structures and future fee trends.

In an interview with Private Funds Management, partners Marc Elovitz and Joseph Smith discuss regulator views on conflicts of interest and how to best deal with these issues as the fund formation climate becomes more complex. Marc and Joe also share their insights on how conflicts of interests are viewed by the SEC within the private equity space and how they are best dealt with in the industry.

Click here to read the interview.

The past year has been mixed for alternative funds. In the hedge fund space, industry assets under management increased by $70 billion to $3.22 trillion, despite lackluster overall returns and noisy withdrawals by certain institutional investors. In the private equity space, industry assets under management grew 4.2 percent to $2.49 trillion, and 8,975 new funds were launched. Regulatory requirements and investor preference for established managers have increased barriers to entry in both sectors. Meanwhile, competition for investor capital has created a buyer’s market with significant negotiation of fund terms.

Click here to read this article in which partner Stephanie Breslow and associate Patrick Dundas discuss current industry trends affecting hedge and investment funds and provide information regarding regulatory developments impacting the market.

An increasing number of private fund managers are turning to alternative products registered under the Investment Company Act of 1940 as a means of growing their assets under management and diversifying their product offerings and revenue streams.

Click here for special counsel Pamela Poland Chen‘s discussion of how closed-ends funds with the look and feel of a hedge fund can allow managers to access a broader investor base and a diversified income stream.

In a typical private equity fund, investors are making capital commitments to a limited partnership that will be drawn down over a number of years at the direction of the general partner of the limited partnership. The structure of the typical private equity fund and the fact that investors have no liquidity once they make their investments in a fund means that investors are often concerned about what happens if things go wrong with the fund.

Read partner Omoz Osayimwese’s discussion of the various remedies investors typically negotiate for in a private equity fund.

A decision issued on Jan. 24, 2017, in the U.S. District Court for the Southern District of New York dismissed a complaint alleging the payment of excessive advisory and administration fees by Prospect Capital Corporation, a business development company regulated under the Investment Company Act of 1940.

Click here to read more about these developments.

From 1 March 2017, the new variation margin rules for over-the-counter derivatives contained in the regulatory technical standards adopted by the European Commission will apply to certain European counterparties.

In anticipation of the 1 March deadline, European counterparties (and any non-EU entities, including funds, that trade with European financial institutions) are in the process of putting in place appropriate risk management procedures and compliant netting and collateral documentation to implement the new VM requirements.

Click here to read more about these developments.