Bierce & Kenerson, P.C.

Checklists and Forms: Private Equity

LEGAL GUIDE TO PRIVATE EQUITY INVESTMENTS

Investments in Service Industries

We serve the financial community by providing legal advice, negotiations and structuring in private placements, international transactions and emerging markets. Our extensive experience in the outsourcing services industry gives us a unique view into the funding, growth (including internal synergies) and exit strategies for service providers and companies that hire service providers.

Product Development

Return on Investment

Investment criteria and restrictions, including sectors as geopolitical, risk strategies, leveraging of investment, and leveraging of portfolio company operations
Policies on borrowing, short-term investments and reinvestment
Organization expenses
Distribution and management fees
Preferred return
Carried profits interests
"Catch up" provisions

Investor Rights

Co-investment rights
Voting
Redemption, withdrawal, transfers
Excused investors: force majeure
Advisory committees
Exclusivity in strategic operations

Operations Planning

Joint ventures between sponsoring investors and investment managers
Outsourcing: administrator, custodian and distributors
Accounting: realization events and net asset value calculation
Cash flow management

Corporate Finance

Tax Strategies

"Flow-through" entities and capitalization of general partner/manager
International Taxation: tax treaties, investment advisers, passive foreign investment companies, controlled foreign corporations and the old "Ten Commandments"
Character and timing of cash flow

Risk Management

Management track record
Risk factors of pooled investments
Conflicts of interest
Indemnification and insurance

Funding the Target Investments

Sourcing and origination
Due Diligence
Corporate Finance Rights: anti-dilution, piggyback, registration, preemption, redemption, puts, voting, board representation
Regulatory Filings

Exit Strategies

Public listing on an Exchange
Sale to: co-investors, joint-venturers, institutions, competitors and individual investors
Corporate takeovers; proxy consents
Debt restructuring; recapitalization
Spin-off; split-off
Merger with another pooled investment

Marketing and Distribution

Compliance Aspects of Distribution

33 and 34 Acts
Investment Company Act of 1940
Investment Advisers Act of 1940
Blue Sky

Cash Flow Management

Investment guidelines and procedures
Draw-down strategies and conditions

Restricted Investors

Benefit plan (ERISA) investors; venture capital operating companies; real estate operating companies
Tax-exempt institutions: unrelated business taxable income
Defaulting investors

Documentation

Private placement memorandum
Subscription applications
Advisory agreements
Placement agreements
Special purpose agreements

Logistics of Distribution

Broker-Dealers
Offshore distribution
Offshore stock exchanges