The structure a sponsor raises into, from vehicle selection and the limited partnership agreement to offering documents and the securities exemption that lets a fund accept capital within the rules.
Every private fund stands on two exemptions. A fund that keeps to 100 beneficial owners can rely on Section 3(c)(1) of the Investment Company Act. A fund that wants more must take only qualified purchasers under Section 3(c)(7), which for an individual means $5 million in investments. Beside that sits the Regulation D choice: Rule 506(b) forbids general solicitation, and Rule 506(c) allows it only if each purchaser's accredited status is verified rather than self-certified.
Those two decisions fix who may invest, how the fund may be marketed, and what the subscription booklet must ask, before anyone reads the limited partnership agreement. We settle them at the term sheet, then draft the fund, the general-partner vehicle, and the management company as one set, so the waterfall, the disclosure, and the eligibility questionnaire agree with one another.
We form closed-end and open-ended funds and have represented clients in matters before the SEC and the CFTC. Offshore, the clock runs too: a Cayman private fund must register with the Cayman Islands Monetary Authority within 21 days of accepting commitments, so locally admitted counsel joins at the first draft.
Choosing the form the fund takes against the strategy, the investor base, and the tax profile, with limited partnership, LLC, corporation, and open-ended vehicles all on the table, so the architecture fits the fund instead of a template.
Drafting and negotiating the LPA that governs the fund, covering capital commitments and drawdowns, the waterfall and hurdle, key-person and removal provisions, and the conflicts and allocation rules the manager will live under.
The private placement memorandum, subscription agreement, and investor questionnaires, the disclosure and onboarding paper that let the fund accept commitments and stand up to an LP's diligence.
Forming the general-partner vehicle and the management company that sit alongside the fund, the entities that hold the carry, charge the fee, and carry the manager's regulatory profile.
Confirming the private-placement exemption the raise relies on, and with it who can invest, how the fund can be marketed, and what the offering documents must disclose, which keeps the fund accepting capital within the rules.
Assembling the formation package into a fund that can actually close, with entity filings, signature-ready documents, a side-letter framework, and the regulatory boxes checked before the first commitment is accepted.
A Section 3(c)(1) fund may have 100 beneficial owners, but a fund of funds or feeder that takes 10 percent or more of the voting interests is counted by its own investors rather than as one. The subscription booklet asks the question because the exemption turns on the answer.
Rule 506(d) disqualifies an offering if the issuer, a general partner, or a 20 percent owner has a covered event in its past, some reaching back ten years. Paid placement agents are covered too. The bad-actor questionnaire is a precondition of the exemption, not paperwork.
When benefit-plan investors hold 25 percent or more of any class of a fund's equity, its assets become plan assets and the manager an ERISA fiduciary, unless the fund qualifies as a venture capital or real estate operating company. Either the LPA caps plan money below the line, or the sponsor builds for the alternative.
Rule 506 interests are covered securities, so no state can require registration, but most states still require a notice filing and a fee within 15 days of the first sale to a resident. The investor list at each close doubles as the blue-sky filing calendar.
A manager relying on the private fund adviser or venture capital exemption files the first part of Form ADV as an exempt reporting adviser within 60 days, updates it every year, and answers to the anti-fraud rule that covers any adviser to a pooled vehicle. Exemption from registration is not exemption from examination.
A Cayman private fund files audited accounts with the Cayman Islands Monetary Authority within six months of its year end and must have anti-money-laundering officers in place. A Luxembourg reserved alternative investment fund needs an authorized manager before launch. Those dates belong in the formation plan, not after it.
The vehicle question is settled against the investor base, whether that calls for a Delaware LP, an offshore feeder, or a parallel fund, and the sponsor's economics are fixed in a term sheet: management fee, carry and waterfall, and the key-person and clawback terms that every later document must obey.
The limited partnership agreement, PPM, subscription agreement, and the GP and management-company formations are drafted as one coordinated set, with the private-placement exemption analysis dictating who can subscribe and how the fund may be marketed.
Anchor investors send comments and counsel; excuse rights, fee breaks, and co-invest terms are worked into side letters while an MFN election framework keeps the concessions from unraveling the LPA. Subscription documents and AML/investor-status diligence run in parallel.
Capital commitments are accepted at first close, Form D and blue-sky notices are filed, the adviser's exemption or registration posture is confirmed, and the machinery for subsequent closes, equalization interest and later-closer true-ups, is already in the LPA.
A fund can only raise what its documents already agreed to.
Fund formation is the work of building the legal structure a sponsor raises into. The work covers choosing the vehicle, forming the fund and its management and general-partner entities, drafting the limited partnership agreement and offering documents, and confirming the securities exemption that lets the fund accept capital. Most of these decisions are made before the first commitment closes, and they set what the fund can raise, where it can invest, and how cleanly it can be wound up.
We form closed-end funds for buyout, growth, and venture sponsors, open-ended hedge and evergreen vehicles, and real-estate funds, along with the entities that run them. The strategy drives the paper. A hedge fund is sold continuously and needs redemption terms, gates, and a valuation policy. A buyout fund is sold once and needs an investment period, a waterfall, and a clawback. A real-estate fund usually needs a REIT or blocker beneath it for tax-exempt and non-U.S. investors. We draft for the strategy at hand rather than adapting the last fund's documents.
It depends on the strategy, the investor base, and the tax profile. Most U.S. closed-end funds use a limited partnership with an LLC general partner and a separate management company, but open-ended and offshore strategies call for different forms. We work the vehicle question against the whole picture, meaning taxable, tax-exempt, and non-U.S. investors, the assets the fund will hold, and the jurisdictions it will reach, rather than defaulting to a template.
Yes. Fund interests are securities, so the offering is either registered, which no private fund does, or fitted to an exemption, almost always Rule 506 of Regulation D. Rule 506(b) allows up to 35 non-accredited but sophisticated investors, at the price of registration-level disclosure to them, which is why nearly every fund admits accredited investors only. The offering is reported on Form D within 15 days of the first sale, with notice filings in the states where investors live. Losing the exemption is not theoretical. A general solicitation under 506(b), or an unverified purchaser under 506(c), turns the raise into an unregistered public offering and hands every investor a right to rescind.
A typical formation produces the limited partnership agreement, the private placement memorandum or offering document, the subscription agreement and investor questionnaires, the management agreement and any GP and side-letter terms, and the entity formation filings for the fund, the general partner, and the management company. We draft and negotiate these as one coordinated set so the economics, the governance, and the disclosure agree with one another.
Yes. From Chicago, London, and Dubai we structure across the jurisdictions sponsors use most, including the Cayman Islands, Luxembourg, and Singapore, and coordinate locally admitted counsel where a registered office, local vehicle, or licensing is required, so the onshore and offshore halves of a fund are designed together rather than bolted on.
VC fund formation, covering LPAs, management-company structures, carry and vesting, and the side-letter and exemption work a venture raise turns on.
Explore →Closed-end buyout and growth vehicles, with LPAs, blockers and feeders, the waterfall, and the governance an established sponsor needs at launch.
Explore →Closed-end and open-ended property vehicles, including REIT structuring, the liquidity and distribution terms, and the tax architecture a real-estate raise demands.
Explore →Perpetual and semi-liquid structures, from periodic subscriptions and redemptions to NAV and gating mechanics and the governance an open-ended vehicle requires.
Explore →Master-feeder and parallel structures, blocker entities, and the onshore/offshore mix that fits a fund's investor base, designed across the jurisdictions sponsors raise through.
Explore →Adviser registration and exemption analysis, marketing and solicitation rules, and the securities structuring that governs the manager and the offering.
Explore →Subscription (capital-call) and NAV credit facilities for funds and their managers. We act for funds and for lenders on documentation, security, and the terms that have to align with the LPA.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.