Structuring Direct Lending Funds: Open-End vs. Closed-End Structures
Recurring Regulatory, Valuation, and ERISA Considerations; Structures to Confront Pervasive Tax Issues
Note: CPE credit is not offered on this program
Recording of a 90-minute premium CLE webinar with Q&A
This CLE webinar will examine issues associated with the formation and operation of direct lending funds, including those organized to lend to small and medium-sized businesses, and to certain real estate developers and other RE market participants.
Among other matters, the panel will review the following key issues:
- Comparing open to closed-end structures, including the following key considerations: liquidity and valuation
- Avoiding liquidity mismatches
- Frequency of Withdrawal Periods
- Length of Notice periods
- Newer strategies
- Length of Payout periods
- Novel Payout calculations (e.g., disassociate from NAV?)
- Most commonly used structures/strategies for US federal income tax issues posed by ECI/FIRPTA/Limitation on Deductions
- Historic: standard Domestic LLCs/LPs when all investors are U.S. taxable investors
- "Season and sell"
- Leveraged U.S. corporate blocker owned by offshore private equity fund invests in or originates U.S. source loans.
- Insurance products: insurance policies/IDFs; annuities
- Post-Trump tax reform: Are corporate structures, even for US taxable investors, the wave of the future?
- Recurring regulatory issues unique to the direct lending funds:
- Investment Advisers Act Section 206: Principal Transactions
- Conflicts among typical affiliates:
- Credit Funds: Originator, Servicer, Principal investment vehicles
- RE Related Funds: typical affiliated RE service providers: broker, leasing, finance, etc.
- Balancing Securities Act/private placement requirements with marketing for business of the fund
A.J. A (Alex) Gelinas
Sadis & Goldberg
Mr. Gelinas focuses his practice on providing tax advice to investment managers of hedge funds, private equity funds... | Read More
Mr. Gelinas focuses his practice on providing tax advice to investment managers of hedge funds, private equity funds and other investment funds on all aspects of their businesses, including management entity and fund formation, partnership taxation issues, compensation arrangements and ongoing investment activities and transactions. He also provides tax advice to U.S. pension funds, sovereign wealth funds and other U.S. and foreign institutional investors in connection with their investments in private equity funds, hedge funds and U.S. joint ventures.Close
Sadis & Goldberg
Mr. Huttler has extensive experience in corporate, finance, investment fund and securities matters, including the... | Read More
Mr. Huttler has extensive experience in corporate, finance, investment fund and securities matters, including the representation of U.S. and foreign investment funds, underwriters, and private clients in various registered public and private offerings of debt and equity securities totaling in excess of $10 billion. His legal practice has exposed him to diverse fund clients with an exceptionally wide range of investment programs and structures, including large mutual funds and hedge fund complexes, private equity firms, real estate partnerships and funds, venture capital funds and funds focused on specialty finance assets.Close
Daniel G. Viola
Sadis & Goldberg
Mr. Viola is the Head of the Firm’s Regulatory and Compliance Group. He structures and organizes... | Read More
Mr. Viola is the Head of the Firm’s Regulatory and Compliance Group. He structures and organizes broker-dealers, investment advisers, funds and regularly counsels investment professionals in connection with regulatory and corporate matters.Close