Private funds law

Secure advantageous terms and the right protections when offering and investing in direct and indirect co-investment opportunities.

Deal-specific co-investments are a fast-growing segment of the private equity market. They offer managers access to additional capital and investors the prospect of reduced fees and improved returns. But there is no one-size-fits-all model: each co-investment is heavily customised, throwing up unique challenges and risks for both managers and investors. Managers need to juggle deal financing options, while co-investors have to respond rapidly if opportunities are to be seized.

Our lawyers have deep experience negotiating direct and indirect co-investment arrangements for managers and investors alike. We help investors to secure better protections, from greater transparency to anti-dilution rights to a measure of influence in the underlying portfolio company. We work with managers on the most appropriate structure for the co-investment, its interaction with their primary fund, and the underlying acquisition documents. We take pride in integrating our funds, tax and corporate expertise to develop innovative solutions for participants in the co-investment.

We advise our clients on the whole suite of co-investment documentation, forming entities and structuring the underlying transaction. Depending on whether it is a direct or indirect co-investment, our clients can rely on us to negotiate everything from a bespoke LPA for a dedicated co-investment partnership to a co-investment agreement with the manager’s primary fund to the acquisition documents for the underlying deal.

MJ Hudson has recently authored a guide for investors and GPs: Private Equity Co-Investments, The Manual. This comprehensive guide covers topics from both the LP and GP perspective, including economic terms and structures, legal and tax issues and trends in co-investments. Learn more and download the guide below.

For an example of our co-investments work, click here.

Move forwards with fund restructurings and related liquidity solutions, advised and supported by lawyers who have walked in your shoes.

When a particular fund is not meeting expectations or is experiencing delays in exiting its portfolio, GPs may opt to restructure by turning to external investors for additional capital or offering existing LPs a route to liquidity. Conversely, when faced with such situations, existing LPs may seek to re-negotiate the terms of their investment with the fund manager.

Whether acting for GPs or LPs, our team will leverage its in-house experience as primary and secondary market investors to devise and deliver tailored fund liquidity and other solutions that re-incentivise fund managers, offer existing LPs liquidity, and facilitate the injection of new capital to support and enhance portfolio assets.

Once a bespoke structure has been put into place, the re-incentivised fund manager will be well placed to restore its track record, whilst existing LPs and new investors will benefit from enhanced liquidity and GP alignment.

Come to market sooner and better prepared, with the help of our intelligent fund formation services.

Even in bull markets, launching a private fund is a big deal. Fund terms are constantly evolving, investor due diligence grows steadily more demanding, and the scope and impact of regulation continues to grow. Different types of investor – HNWIs, pension funds, DFIs – have distinctive and sometimes competing concerns.

MJ Hudson helps clients navigate this fast-changing environment. We anticipate market developments and what our clients are going to need next. Our lawyers have deep knowledge of fund agreements and structures and our ability to act as both onshore and offshore counsel allows us to streamline the advisory process for clients. We take pride in integrating our funds, tax and regulatory expertise with our outsourced fund management services and with our marketing and IR capabilities, developing innovative, integrated solutions for our clients. We act for more than 400 GPs, LPs, placement agents and others worldwide. They represent a broad cross-section of the PE/VC world, from mature multi-strategy managers to emerging teams and spin-outs.

We take charge of managing the project from the start. We prepare and negotiate the whole suite of fund documentation, from the LPA to investor side letters and provide legal value-add into the client’s fund marketing materials, as well as structuring management group entities and negotiating governance arrangements. We are happy to plug clients into our network, enabling them to forge new relationships and find new opportunities.

Enhance GP/LP alignment and negotiate better terms and protections for your private fund investments.

Private funds are becoming more opaque, despite recent regulatory attempts (such as AIFMD) to make them more transparent, and fund legal documents are becoming more and more complex. This makes the net result of a primary fund investment increasingly hard to understand.

MJ Hudson seeks to deconstruct these complexities and provide guidance on the terms of every fund reviewed. MJ Hudson has pooled its extensive private funds experience, gathered from acting over a number of years for both GPs and LPs and working in-house at both fund managers (e.g. Coller Capital, Credit Suisse and Man Group) and institutional investors (e.g. Capital Dynamics, EIF and USS), and formed a dedicated team of specialist lawyers who have considerable experience acting for institutional investors making investments in private funds. With the benefit of this experience, MJ Hudson assists its LP clients by enhancing GP/LP alignment on every investment fund reviewed and negotiated.

Few law firms offer a one-stop solution for LPs’ needs across the primary, co-investment and secondary sectors, with a sufficient depth of legal and market experience to devote across all such sectors. MJ Hudson has aimed to provide a solution to that problem through the creation of the LP unit, focused solely on the requirements of its LP clients.

Buy or sell private fund interests through an efficient process, with confidently negotiated terms and the right protections.

Private equity and other closed-ended private funds are, by their nature, illiquid, with investor capital typically locked in for ten or more years. Investors, however, may wish to sell all or a part of an existing private fund investment portfolio for regulatory, strategic, portfolio management or other reasons. A market for these otherwise illiquid fund interests has developed, driven by secondary buyers seeking to acquire fund interests that they believe will provide profitable returns within a particular timeframe.

MJ Hudson takes a commercial approach to secondary transactions, focusing on efficient project management and driving the timetable to completion, whether acting for the buyer or the seller, or the fund’s GP – always pro-active, never reactive. From the point of origination, we will take responsibility for drafting and negotiating all deal documentation, and preserving the key stakeholder relationships your team has worked hard to maintain.

Our team will work hard to ensure your transaction is executed in line with your commercial expectations, whilst protecting your legal position and preserving your strategic intentions and relationships.