At Hills Stern, we serve a diverse array of institutional clients. From development finance institutions (DFIs) to public pension plans and retirement systems, insurance companies, university endowments, non-profit organizations, and family offices, our firm provides comprehensive assistance. We excel in navigating complex investment landscapes, offering support with various investments, co-investments, and separately managed accounts, and investment manager relationships – across multiple asset classes, strategies, and jurisdictions.
Private Fund Reviews
A cornerstone of our firm’s expertise lies in advocating for institutional investors regarding their alternative fund investments, including subscriptions to both liquid and illiquid commingled pools, co-investments, side pockets, and seed investments in fund sponsors. Through our extensive exposure to a wide array of private investments, we understand market-standard terms and we understand when strategic negotiation tactics are warranted.
Hills Stern delivers a comprehensive suite of services to meet the needs of our institutional clients, including:
- Negotiating the terms of private fund agreements, including limited partnership and operating agreements, subscription documents, side letters, and other pertinent fund-related documents.
- Providing support in establishing a robust legal review process, crafting standard form side letters, and furnishing analyses for internal investment committee approvals.
- Facilitating negotiations for co-investments, funds-of-one, side cars, and joint ventures.
- Providing continuous monitoring services concerning fund investments, including assisting most favored nation (MFN) elections, responding to requests for confirmation letters for credit facilities, limited partner and LPAC consents, and reviewing amendments to governing documents.
- Advising on and negotiating the sale or acquisition of private fund interests within the secondary market, as well as navigating elections to liquidate or roll private fund interests in sponsor-led secondary transactions.
- Crafting and negotiating strategic partnerships, special investment relationships, and evergreen programs with investment managers.
- Assisting with fund terminations, liquidations, and final distributions, while also addressing matters related to general partner removals and breaches of governing documents.
Separately Managed Accounts (SMAs)
Hills Stern represents clients in negotiating investment terms for a diverse range of investment manager engagements, including separately managed accounts (SMAs), evergreen investment programs, and outsourced chief investment office (OCIO) relationships. These arrangements cover various asset classes, comprising fixed income, public equity, private equity, public and private real assets, and cash overlay strategies. We provide counsel on both discretionary and non-discretionary mandates within investment management engagements; and routinely review and negotiate various related documents such as investment advisory agreements, master custody agreements, and transition manager agreements.
Co-investments
We represent institutional clients on co-investment matters ranging from single asset co-investments to “funds of one” set up to co-invest in multiple assets from several related funds. Drawing on private acquisition as well as investment management expertise, these transactions often close under significant time pressure. In addition to review and negotiation of acquisition vehicle documentation, Hills Stern typically conducts a “fatal flaw” review of the underlying investment documentation. Our co-investment experience ranges from early-stage venture capital to growth private equity and infrastructure investments.
Secondary Market Transactions
Hills Stern regularly represents institutional investors, whether as buyers or sellers, in the secondary sale of private investment fund assets. Transactions include single portfolio investment transfers, as well as the transfer of multi-billion-dollar investment portfolios, involving multiple buyers and sellers. Our attorneys are experienced working with investment bankers and brokers engaged by our clients to facilitate the identification of buyers and the sale of portfolio assets. They are intimately familiar with the structure and market terms in the secondary market and frequently negotiate favorable terms intended to expose issues and mitigate risk related to the transfer.
Hills Stern attorneys are also well-versed in the structures and market terms for sponsor-led secondary transactions, where investors are asked to elect to either liquidate or roll over their interests in a portfolio of assets into a continuation fund.
Portfolio Monitoring Services
Hills Stern has extensive experience advising institutional clients on portfolio monitoring matters, including MFN election reviews; analysis of and recommendations on fund manager requests for consents and amendments; and the analysis of issues and options in connection with key person events, potential cause events, and fund restructurings. This depth of experience in advising on post fund-origination matters allows Hills Stern to provide its clients with efficient, seasoned counsel in managing issues and requests arising from diverse alternative asset portfolios.
Investment Program Services
Our attorneys provide guidance to institutional clients in the development of investment policies, side letter templates, review checklists, standardized agreements and compliance policies and procedures for their investment programs. These resources are designed to streamline internal and external processes, ensure policy conformity and maintain consistency in the origination and management of investment portfolios. Examples of our offerings include:
- Creating agreement issues charts (“matrixes”) designed to summarize key terms and pinpoint any gaps from investor expectations and market terms, accompanied by related practice guides to assist internal teams in utilizing the matrix effectively.
- Crafting side letter templates and related practice guides.
- Crafting template partnership agreements, investment management agreements, and subscription documents tailored for special purpose vehicles and funds-of-one.
- Creating template term sheets and agreements for direct debt and equity investments and co-investments.
In addition to these services, Hills Stern provides advisory support to institutional investors, including benchmarking best practices and contributing to new product development initiatives.
U.S. Securities Laws and Regulations
The attorneys at Hills Stern have significant expertise in U.S. securities laws and regulations, providing invaluable assistance to institutional investors in navigating the investment regulatory landscape. This includes guidance on both investment-related matters and internal compliance policies and procedures. Our attorneys remain vigilant in monitoring statutory and regulatory changes, as well as notable litigation and enforcement developments, ensuring our clients stay abreast of material concerns affecting institutional investors.
We routinely counsel institutional investors on various aspects of U.S. federal securities laws, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940. Our deep understanding extends to U.S. anti-money laundering regulations, as well as federal and state laws and regulations governing the formation and operations of investment managers and private investment funds.
Moreover, our attorneys provide comprehensive support to institutional investors in fulfilling their filing obligations with the U.S. Securities and Exchange Commission under public trading laws, including the preparation and submission of forms such as Schedule 13G and Form N-PX.
Training Services
Our law firm provides specialized training services that address client internal policies and procedures, focusing on codes of ethics and the handling of confidential and material nonpublic information (MNPI). These tailored training sessions are designed to equip internal staff with the necessary knowledge and skills to navigate complex ethical considerations and regulatory requirements within their specific organizational frameworks.
