Womble Bond Dickinson hosted the first event in their FUNDamental Series, taking a look at the key aspects of setting up a Fund.
The session got underway with WBD Partner, Barry Simpson, delivering a ‘back to basics’ look at the UK regulatory classification of Collective Investment Schemes (CIS) as defined by FSMA, in comparison to the European AIFMD criteria for Alternative Investment Funds (AIFs). The importance of proper classification was highlighted with a review of the different applicable regulatory licences, reporting and promotional restrictions for each. Looking further afield, Barry concluded an informative session with a commentary on overseas Funds, in particular the BVI classification and rules surrounding Incubator Funds, Approved Funds, Private Funds and Professional Funds in the jurisdiction.
Next to the stage was NCM Chief Executive, Kathleen McLeay, bringing to life the AIFMD rules surrounding ‘sub threshold’ Managers (AIFM) with a real life case study. The audience were taken on a journey through a General Partner’s experience of securing temporary funding with the challenges of remaining sub threshold, when the Fund had already reached its permitted level of investment. The legal and regulatory implications of what constitutes ‘temporary’ were fundamental in finding a solution. Kathleen concluded with recommendations on how Managers can make provisions from the outset which can make the lending process easier, should the need arise during the Fund’s lifetime.
A core, but often underestimated, aspect of fund operation is the establishment of banking facilities. Thankfully, Mike Lewis, Head of Private Equity at RBS International, was there to give his take on the essentials of banking for Funds. A review of subscription facilities and why are they in demand; and optimising Fund and Manager cash balances were covered, along with a look at the funding of General Partner co-invest facilities.
The FUNDamental Series seminars, hosted by Womble Bond Dickinson, are suitable for those working with funds, looking to set up a fund or invest in a fund.