Consulted client in connection to setting-up alternative hybrid structures and tokenized real estate lending “master feeder” fund (US/Cayman)
Advised client on potential issuance of fund tokens and their possible effect on an existing LP structure
Consulted fund manager on setting up a SPV for the tokenization of a LP interest in a venture capital fund, including advising on structure’s classification for purposes of US and Cayman securities regulations
Services Related to Formation and Operation of Tokenized Funds
Tokenized funds offer a number of potential benefits as compared to traditional funds.
- Access to a global pool of capital;
- Increased liquidity;
- Simplified digital management of significant number of investors via smart contracts;
- Automated and transparent governance, voting and compliance using smart contracts on blockchain;
- Prompt cryptocurrency operations as an alternative to banking transactions in fiat.
Our fund tokenization services include:
- Developing a fund’s strategy and structure;
- Possible integration of the token issuer into the current structures or creation of a separate tokenized structure for existing manager;
- Advising on jurisdiction and cross-jurisdictional issues;
- Implementing the chosen trust structure and preparing all the necessary documentation;
- Preparing private offering memorandum and subscription documents;
- Advising on foreign and US investor qualifications;
- Advising on AML/KYC compliance.
Fund token issuers must structure each offering very carefully to take into account various pitfalls presented by securities regulations, AML/KYC requirements and current investment and governance restrictions. Heightened global liquidity may present additional operational complications, for example, with secondary market re-sales and maintaining capitalization tables.
Some of the other major considerations that should be acknowledged and addressed by emerging tokenized fund managers are that security tokens may by subject to limitations on re-sale, number of investors, investor solicitation and acceptance, tradability on secondary markets in the US and foreign jurisdictions, etc.
We help our clients efficiently navigate the web of challenges arising throughout formation, governance and operation of tokenized funds.
- Venture Capital Funds Formation Guide
- Introduction to Private Equity Funds
- Private Equity Funds – Formation and Operation
- Closed-End Fund Formation
- Private Equity Demystified – Explanatory Guide
- How to Start a Hedge Fund
- SEC’s Analysis of the Market for Unregistered Securities Offerings
- Tax Treatment of Partnership Funds and Mergers of Investment Companies
- Hedge Fund Basics – IRS Guide
- Opportunities in Private Equity
- Private Equity in the Developing World: Determinants of Transaction Structures
- Hedge Fund Fully Managed by Artificial Intelligence
- Sample Limited Partnership Agreement of the Fund
- Sample Real Estate Fund Formation Agreement
- Private Equity, Venture Capital and Hedge Funds
- Hedge Fund Basics – IRS
- Supporting Innovation Through SEC’s Mission to Facilitate Capital Formation
- Information and Observation on State Venture Capital Programs
- Funds of Funds Arrangments
- Framework for Investor Analysis of Hedge Fund Governance
- Implications of the Growth of Hedge Funds – SEC.gov