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What's New in Private Equity Fund Deal Terms
There may be nothing new under the sun but there are a number of new wrinkles cropping up in the private equity fund universe which deserves some comment. Herewith a few from a fund term sheet I have recently been reviewing.
In the, “It's About Time,” department, the general partner/sponsor of a particular fund has offered to spread the management fee over the assets of the instant fund plus the successor fund if one is organized with commitments equal to or exceeding the commitments commanded by the instant fund. The idea is that, if no successor fund is organized, the management fee is calculated as a percentage of the capital commitments of the current fund; if, however, a large successor fund is organized, then the management fee is calculated as a percentage of the investments of the current fund and the successor fund, measured at cost and net of write offs and distributions. This is a clear concession to LPs, who are claiming that the management fees measured by commitments, once several funds are concurrently in existence, are well in excess of what the general partners should in the aggregate be charging.
A second interesting provision has to do with the management fee offset. One recent offset provision is 100% for fees charged to the portfolio companies except, and this is the interesting point, the fees paid to the “venture partner” of the GP. “Venture partner” is a term now currently used for that individual who used to be called the “entrepreneur-in-residence” … an individual with operating experience who is expected not so much to screen and decide on investment and harvesting strategy as to pitch in as a pro-active board member in the execution phase of the overall investment strategy.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.