The Investment Management Practice at Ropes & Gray is among the largest and most diversified of any U.S. law firm. The principal focus of our practice is the representation of investment companies, investment advisers, hedge fund sponsors and purchasers of derivatives and commodities instruments. More than 130 of our lawyers devote a significant portion of their time to the investment management area.

Practice Focus Areas

Investment Companies and Their Trustees

Our registered investment funds practice received the highest national rankings (Band 1) in 2011 from Legal 500 and Chambers USA. In addition, we were ranked nationally as a leading firm in the Investment Funds: Registered/Mutual Funds category by PLC Which Lawyer Yearbook 2010. We also received from Chambers and Partners its 2009 Award for Excellence, recognizing Ropes & Gray as the preeminent Investment Funds practice in the United States.

We serve as regular counsel for over 1000 mutual funds (or their independent directors or trustees). Our practice spans the entire spectrum of the industry, including:

• Open and closed end funds and interval funds;
• Proprietary funds sponsored or advised by insurance companies, brokerage firms, banks, and thrifts;
• Exchange Traded Funds (ETFs);
• Business development companies;
• Funds for institutional investors;
• Funds supporting variable annuity and variable life insurance products;
• Funds with sophisticated structures necessitated by tax and/or regulatory reasons, such as master-feeder funds; multi-series trusts, and mirror or parallel funds;
• 529 College Savings Plans;
• Funds investing in hedge funds, commodities and other alternative investment asset classes; and
• Cross/border and international investment strategies.

Our advice to investment companies encompasses formation, operation, regulatory matters, representation of independent directors and trustees, fund distribution arrangements, fund mergers, liquidations and other re-structurings, compliance programs, internet and/or email delivery issues involving proxies, prospectuses and other disclosure materials, operation of company websites, data protection and privacy programs, data security breaches, anti-money laundering programs and OFAC requirements.

Investment Advisers

We represent many leading investment advisory firms in all aspects of their business. The representation of our national and international advisory clients encompasses:

• Federal and State Registration Filings;
• Formation and operation;
• Compliance Policies and Procedures;
• All aspects of operations and regulatory affairs; and
• Product development and delivery of advisory services.

Hedge Funds

Ropes & Gray also serves as counsel to numerous hedge fund sponsors. We assist these clients in the organization and offering of hedge fund products, including both U.S. and non-U.S. vehicles. Our advice encompasses product design (including profit sharing and management fee structures), tax planning (including the use of structures that minimize current taxable income to the sponsor and its employees), regulatory compliance (including how to avoid investment company status under the Investment Company Act of 1940 and commodity laws compliance) and trading issues.

Derivatives and Commodities

Ropes & Gray represents numerous large and sophisticated endowments, hedge funds, mutual funds and investment advisers which utilize derivatives to implement a variety of complex investment strategies. We have approximately 20 lawyers who spend a substantial portion of their time assisting clients with respect to derivatives matters, including the following:

• Over-the-counter transactions such as swaps, options, forward contracts, repurchase agreements/reverse repurchase agreements, market-access transactions and structured notes and other structured products;
• Exchange-traded transactions, such as futures contracts and exchange-traded options;
• Currency overlay programs and other complicated currency management and hedging programs;
• Domestic and foreign prime brokerage programs including so-called “enhanced” prime brokerage programs and term agreements;
• Securities lending programs including programs in which our clients will lend securities directly to counterparties, and lending programs offered by custodial providers or third-party lending agents; and
• Tax treatment of derivatives transactions.

We are experts in negotiating the terms of all key industry documents such as the ISDA Master Agreement, the IFEMA master agreement, the FEOMA master agreement, the Master Repurchase Agreement, the Global Master Repurchase Agreement, the Master Securities Loan Agreement and the Global Master Securities Lending Agreement. In fact, many of the provisions we developed for our clients to tailor the master documentation to their needs have been adopted over the years by the derivatives community as the industry standard.

Mergers and Acquisitions

In addition to our regular representation of investment advisers, we have an active practice representing buyers and sellers of money management businesses. Our lawyers have worked with several of the nation's leading asset management consolidators as well as medium-to-smaller-sized advisory firms in connection with merger and acquisition activities. As a result of this experience, we understand what it takes to get deals done successfully from the perspective of both buyers and sellers. Acquisition transactions in the investment management business are fast paced and complicated, and we have the experience to achieve timely, successful results for clients.

Taxation

The depth and sophistication of Ropes & Gray's Investment Management Practice has kept our tax lawyers on the cutting edge of all aspects of the federal income taxation of registered and unregistered, U.S. and foreign pooled investment funds and their advisers. Our practice in this area is comprehensive, covering all tax issues relating to a fund's organization, tax-efficient portfolio strategies, treaty issues arising out of non-U.S. investment and/or non-U.S. investors and fund reorganizations, and similar transactions. We also advise on issues more specific to fund advisers, such as mergers and acquisition of the advisory entity, or tax efficient structures for the adviser's compensation. Our partner, Susan Johnston, is a co-author of the leading investment company taxation treatise, Taxation of Regulated Investment Companies and Their Shareholders.

ERISA

Approximately 20 professionals, including seven partners, make up our Employee Benefits Practice Group. We have an excellent working relationship with policymakers and other key people at the Department of Labor through both our Boston and Washington-based partners.  With the substantial growth in pension assets, the consolidation of the financial services industry, and the rapid development of new products and services, investment managers face increasing challenges in dealing with a statute that is, in many cases, out of step with current market trends. Consequently, we are frequently called upon to apply creativity and insight as well as technical expertise in order to find ways of bringing products and services to market.

Portfolio Debt Restructuring

We have extensive experience representing investment managers and funds in connection with restructuring taxable and tax-exempt debt. In addition to individual clients, we frequently represent informal or formal committees of bondholders. Our experience includes:

• Consent solicitations;
• Exchange offers;
• Pre-packaged or pre-negotiated bankruptcies;
• 363(b) sales of assets;
• Insolvency and bankruptcy proceedings involving financial intermediaries such as broker-dealers;
• Advice to boards of directors and equity sponsors with respect to fiduciary duties and liability issues;
• Dealing with indenture trustees in the exercise of remedies;
• Advice regarding informational barriers and trading restrictions; and
• Liquidations and restructurings of structured products and structured product vehicles such as CMOs, CLOs, CDOs and SIVs.

Securities Litigation and Government Enforcement

Ropes & Gray’s Securities Litigation and Government Enforcement Practices are among the strongest and most experienced in the nation. We have brought and defended cases throughout the United States and appeared in state and federal courts on behalf of businesses, issuers, underwriters, directors and officers, and financial service firms as well as private equity and hedge funds. We have been involved in all aspects of class, derivative and individual actions alleging securities fraud, breach of fiduciary duty and other corporate misconduct. Our clients include large financial institutions and financial service complexes, bulge-bracket private equity funds, individual investment advisors, brokerage firms, mutual funds and hedge funds. Our attorneys have defended numerous securities fraud claims, including those related to market timing, stock option back-dating and excessive mutual fund advisor fees. In the areas of public and private securities offerings and acquisitions, we have been responsible for establishing important precedents that substantially limit the scope of claims against issuers and their directors and officers, shrinking the class of possible claimants and claims.

Drawing upon the talents of our many lawyers, several of whom are former federal prosecutors or former members of the SEC staff, the firm has successfully represented numerous financial services clients in investigations, as well as criminal, civil and administrative proceedings before the Securities and Exchange Commission (SEC), the U.S. Department of Justice (DOJ) and other state and federal agencies. We also regularly advise and represent investment management clients with indirect interests or collateral exposure to various regulatory and government matters.

Broker-Dealers

Advising broker-dealers is a regular part of our investment management practice. Our recent experience in this area includes:

• Representation of mutual fund distributors in connection with advertising and sales literature, and preparation of underwriting and dealer agreements;
• General advice on SEC and FINRA rules, including those related to recordkeeping, compensation, gifts and entertainment;
• Representing private fund sponsors and advisers and private placement agents on the full range of securities and FINRA issues which arise in the fund raising process, including state “blue sky” registration issues, and presentation of related performance information;
• Organization of new broker-dealers including registration with the SEC and FINRA; and
• Advising on the regulatory aspects of merger and acquisition transactions involving broker-dealers.

Our Clients

Ropes & Gray represents a variety of United States-based investment management firms, ranging from some of the nation's largest firms, with hundreds of billions of dollars under management, to start-up ventures. We also counsel non-U.S. investment firms and other financial institutions with respect to their U.S. activities and operations.

Contact

For further information on this area of practice, please contact:

• Bryan Chegwidden
• John M. Loder

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