Advising on the activities of hedge and private equity funds certainly keeps lawyers on their toes. For Fried Frank's asset management whizzes, it's the variety and ever-evolving nature of the practice that leads them to recommend becoming a lawyer in the area.
Chambers Associate: What does Fried Frank's asset management group do?
Lisa Schneider, partner: The Fried Frank asset management group represents hedge fund and private equity managers in all aspects of their businesses, including: the structuring and offering of new funds and other products; ongoing operations and strategic planning; negotiations with investors; the structuring of new management companies, and carried interest and compensation arrangements; advising on seed and stake transactions; and negotiating the spin-out of fund teams from larger institutions. We are known for representing some of the most sophisticated fund managers in the industry, combining our technical skills with a commercial and practical mindset in order to best represent our clients.
“We are known for representing some of the most sophisticated fund managers in the industry.”
Bryan Hunkele, partner: We specialize in counseling large sponsors around the world, including Bain Capital, BlackRock, Blue Bay, Brookfield, Fortress, Goldman Sachs, HPS Partners, Permira and many others.
Joanna Rosenberg, associate: Half of the group focuses on hedge fund formation and the other half focuses on private equity fund formation. We also have a regulatory asset management subgroup (which I am a part of), which focuses on Advisers Act issues, as well as certain Investment Company Act and Securities Act issues.
CA: What kind of work can associates expect to do?
JR: Day to day, associates draft and revise offering memoranda and governing documents for new private funds and negotiate investment management agreements. Fried Frank also has an active practice in the area of fund manager M&A, and so asset management associates will also assist in due diligence relating to fund managers in which a client is purchasing a stake or the entire business. As a member of the regulatory asset management subgroup, I field regulatory questions about the Advisers Act, Investment Company Act and Securities Act from the asset management group but also from the M&A group and capital markets group.
CA: What do partners do?
LS: Working as a partner in this practice area is extremely satisfying, both professionally and personally. My day involves reviewing and negotiating complex agreements and offering documents, working with clients to develop sound and innovative solutions to various issues, and providing day-to-day advice on a variety of different topics that touch upon the investment management space.
“Each phase of a fund’s life-cycle presents unique challenges that require different skills and play to different strengths.”
CA: What are the best things about the practice?
BH: Each phase of a fund’s life-cycle presents unique challenges that require different skills and play to different strengths: (a) the structuring phase is thought-intensive, and it emphasizes creativity and teamwork; (b) drafting the fund documents requires diligence and writing skills; (c) fundraising and investor negotiation involves the use of management and personal skills, as well as the ability to think on one’s feet; and (d) the operational phase, in which all the work one has done in the other three phases is applied to real-world challenges, is full of surprises and emphasizes critical thinking.
JR: The regulatory asset management practice at Fried Frank involves working on many different matters on any given day, which keeps things interesting and challenging. There are also certain questions that come up regularly, which creates a nice mix of consistent, familiar work and new issues that require deep and often creative thinking.
LS: Because this practice area often involves providing counsel to hedge fund and private equity managers throughout their lifespans, attorneys are able to grow and develop longstanding relationships with clients. In addition, our practice evolves as the fund industry evolves, which is exciting and allows us to continually work on new and interesting matters.
CA: Which factors are currently affecting the practice area?
JR: The condition of the financial markets can impact our clients’ ability to fundraise and to some extent the type of private funds clients are forming. In addition, the recent change in administration slowed the pace of SEC [Securities and Exchange Commission] rulemaking and, to some degree, SEC enforcement action.
“The condition of the financial markets can impact our clients’ ability to fundraise and to some extent the type of private funds clients are forming.”
LS: The industry has been digesting the new US tax legislation and its impact on hedge funds and private equity funds. It will be interesting to see how the space evolves as a result of these changes.
BH: In addition, we have seen that as more and more businesses implement the ESG criteria into their investment and operational frameworks, there has been a significant impact on fund and product launches. Specifically, we have noticed a greater interest in social impact funds, and increased investments generally in the renewable energy sector, eco-friendly products and manufacturing, and under-served communities.
CA: How can students keep up to date with trends in the market?
BH: The Wall Street Journal does a great job of covering the business elements of our practice area, while SEC releases and actions relating to the Investment Advisers Act provide a good avenue for getting to know the latest regulatory focus.
LS: Reading the newspaper and various free online industry newsletters is a great place to start.
CA: Where can new associates expect to be in five years’ time?
BH: With hard work and the right set of skills, associates could be leading the closing of a multibillion-dollar fund – the deals which will be in the news for the next three or four years.
LS: One of the best parts of the asset management practice is that associates are offered the opportunity to have direct exposure to clients and to take on as much responsibility as they are comfortable with early on. It is the perfect practice area for an attorney looking to gain enormous experience, a wealth of knowledge and significant client exposure early in their career.
“With hard work and the right set of skills, associates could be leading the closing of a multibillion-dollar fund.”
CA: Which opportunities are unique to Fried Frank?
BH: I think our group provides a unique combination of lean staffing and high-profile matters. At our size, we do not have the luxury to ask associates to review subscription materials and investor questionnaires during their first year. Of course, there will be some of that, but the professional opportunities our young associates enjoy (with appropriate supervision) are otherwise a year or two ahead of what they might typically see elsewhere.
JR: Fried Frank is a place where hard work and quality work product are rewarded. If associates show a strong work ethic and an interest in the matters they are working on, they are sought out and given more responsibility and more challenging assignments.
LS: Because the Fried Frank asset management group has extremely sophisticated, longstanding clients, I have had the opportunity to develop relationships with wonderful people and work on the most interesting and cutting-edge matters. The combination of Fried Frank’s legal acumen and the collegiality of the attorneys who work here is unparalleled.
CA: Do you have any words of advice for students interested in this area?
BH: Pay attention to market news and try to understand the business motivations behind what you read. The separation between the practice of law and business is something of a myth, as a good lawyer needs to understand their clients' business goals in order to provide meaningful legal advice.
JR: I would suggest taking a class on securities regulation. It helps to give high-level context to the work that asset management associates do at the firm. I would also recommend reading the newspaper.