Investment Funds

Freeman offers sophisticated legal counsel to private funds and investors, setting the stage for capital to transform industry sectors—and to create value from calculated risk and insight.

We offer legal counsel that moves past conventional wisdom, reimagining models and barriers—providing innovative solutions that mitigate risk and drive reward.
Freeman has been ranked by U.S. News and World Reports as a “Tier 1” law firm for tax law. Our tax attorneys have been recognized nationally and internationally, including being named to U.S. News and World Report’s Best Lawyers in America list and recognized by Chambers & Partners as among the leading tax attorneys in the United States. Nearly one-third of our attorneys serve as law professors at tier-one law schools.
Our tax attorneys assist fund clients with sophisticated tax planning and tax strategies, including fund structure; carried interest tax planning; blocker structures; international tax planning, including Controlled Foreign Company (CFC) and Passive Foreign Investment Company (PFIC) tax planning; avoiding and minimizing phantom income; employing offshore parallel vehicles and hybrid entities; partnership taxation matters; and recapitalizations.

Investment Fund Counsel

Capital is the lifeblood of our modern American economy. It carries the capacity to move lives and markets forward. We help participants in the fund sector set the gears in motion to transform industry sectors—and to create value from calculated risk and insight.

Freeman represents investment advisors, funds, and institutional investors, providing strategic legal guidance and sophisticated tax counsel. Freeman attorneys counsel registered and exempt investment advisers, such as private equity, hedge fund, venture capital, and mutual fund managers—from fund formations and structures, to acquisitions and dispositions, to regulatory compliance. Our representative capacity includes:

Private equity funds
Hedge funds
Real estate funds
Energy funds
Venture capital fund
Fund-of-funds
Alternative investment strategies

We assist fund clients with registrations; exemptions; regulatory filings; trading; offshore, tax-efficient structures; U.S. and offshore hedge funds; registered investment companies; broker-dealers; and investors.

At the most practical level, our clients know that our default answer will never be a reflexive, “no.” Instead, we commit to exhausting the potential avenues to get the job done. We start from the premise that anything is possible; and we work to get you from where you are to where you want to be.

We join our clients in the trenches, navigating and evaluating risks, negotiating with intention, and recognizing that transactions are not zero-sum propositions—synergies and win-wins lie at the heart of getting to “yes.”

A Unique Firm for Unique Clients

Our attorneys bring big-firm talent in a boutique model. We are nimble and adaptive to change, values increasingly in demand in a fast-changing economy and evolving legal landscape. Our tax attorneys include former IRS trial attorneys, former clerks to the Chief Judge of the United States Tax Court, tax law professors, dual-credentialed CPAs, and attorneys with advanced LL.M. tax degrees from the most prestigious tax programs in the nation. One-third of our attorneys serve as law professors at tier one law schools, teaching tax law.

Investment Advisers

Freeman’s attorneys offer counsel to investment advisors, from boutique advisory firms to larger institutions. We advise with respect to organization, registration, and regulatory compliance, providing trusted legal counsel to registered investment advisory firms, financial advisors, and wealth management professionals as they navigate a highly regulated industry.

Private Equity Fund Formation

Freeman serves as trusted counsel to clients in the private equity space, working with family offices, institutional investors, and private investment firms. We represent private equity fund sponsors, setting a course across a spectrum of transactions and activities, including:

Fund structuring and formation
Capital formation
Compliance with the Investment Advisers Act of 1940 and the Investment Company Act of 1940
Investment adviser registration
U.S. Securities and Exchange Commission (SEC) and state securities commission compliance

Hedge Funds

Our attorneys provide legal counsel to hedge fund clients, ranging from customized investor vehicles to complex investment strategies and regulatory compliance. We assist with structures and vehicles in the United States and non-U.S. jurisdictions. Our attorneys provide counsel with respect to fund formation, compliance and regulatory matters, fund management, transactions, and related tax matters.

Private Real Estate Funds

Private real estate funds provide structures that allow for tailored investments and real estate exposure that is suited to investor risk profiles. As high-quality returns become increasingly difficult in capital markets, investors turn to real estate funds as a favored method of building wealth due to its access to leverage and ability to hedge against inflation. We assist sponsors and investors with respect to private real estate funds.

Commodity Pools

Commodity pools, also known as “managed future funds,” invest pooled funds in commodity futures contracts and options.

Unlike securities markets in the United States, which are regulated by the Securities and Exchange Commission (SEC), commodity pools are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association.

World-Class Tax Counsel

We help clients navigate and employ complex, tax-efficient investment vehicles. From addressing unrelated business taxable income (UBTI) concerns, to tax minimization, international tax planning factors, carried interest pass-through and tiered structures, to Employee Retirement Income Security Act of 1974 considerations, we cover the waterfront on complex tax matters. We assist clients with a range of tax-related transactions, including:

Mergers, acquisitions, and dispositions
Tax-free spinoffs, split-offs, and split-ups
Real estate investment trusts (REITs)
Joint ventures and partnerships
Investment fund formation and structuring
Cross-border transactions and international tax planning

Investors and fund managers generally share a number of common tax goals, including minimizing “phantom” income—that is, profit allocations that do not have a corresponding cash distribution.

In keeping with this goal, funds investing outside of the United States typically attempt to mitigate, if not avoid, U.S. anti-deferral regimes. Historically, the two most notable regimes in this respect are the Subpart F rules applicable to U.S. shareholders of “controlled foreign corporations” (CFCs) and the “passive foreign investment company” (PFIC) regime. In addition, the Tax Cuts & Jobs Act introduced another commonly encountered anti-deferral regime: global intangible low-taxed income (“GILTI”). We provide comprehensive counsel with respect to international tax matters.

Investment Fund Regulation

Federal and state securities laws have evolved and expanded over time and include the following statutory acts

The Securities Exchange Act of 1934.

The Securities Exchange Act of 1934 (Exchange Act) fosters transparency and fairness in secondary securities markets. The Act requires companies with securities traded on national securities exchanges and companies with large numbers of shareholders to register their securities with the SEC and abide by a variety of reporting requirements. The Exchange Act also contains an important catch-all fraud provision. Section 10(b), as implemented by SEC Rule 10b-5, makes it unlawful to, “in connection with the purchase or sale of any security,” make “any untrue statement of material fact” or to engage in fraudulent schemes.

The Securities Act of 1933.

The Securities Act of 1933 (Securities Act) governs the process by which companies issue securities. The Act prohibits any person from offering or selling a security to the public unless the offering has been registered with the Securities and Exchange Commission (SEC) or falls under an exemption. The Act’s exemptions include private placements, certain small issues, and offerings involving certain classes of securities (e.g., government securities and bank securities). If an exemption does not apply, an issuer must file a registration statement with the SEC that includes detailed information about the issuer’s business operations, financial condition, and the nature of the offering.

Investment Company Act of 1940.

The Investment Company Act of 1940 regulates issuers that engage primarily in investing, reinvesting, and trading in securities. Common examples of investment companies are mutual funds and exchange-traded funds (ETFs).

The Investment Company Act (1) requires investment companies to register with the SEC, subject to certain exceptions, (2) imposes disclosure requirements for the investment company and its investment policies, (3) prohibits many types of direct transactions between investment companies and affiliated persons, (4) limits an investment company’s ownership of shares of other investment companies, and (5) requires investment companies to create shareholder-elected boards of directors to police management conflicts of interest.

Investment Advisors Act of 1940.

The Investment Advisers Act of 1940 imposes a range of requirements on persons or firms in the business of advising others about the value of securities or the advisability of investing in securities. Under the Act and associated SEC regulations, investment advisers are fiduciaries, meaning they must act in their clients’ best interests, fully disclose any material conflicts of interest, seek best execution for client transactions, and have a reasonable basis for client recommendations. The Act also requires investment advisers to register with the SEC, subject to certain exceptions, and imposes certain disclosure obligations on registered advisers.

Investment Advisors Act of 1940.

Private Securities Litigation Reform Act of 1995.

Congress enacted the Private Securities Litigation Reform Act of 1995 (PSLRA) to minimize frivolous securities litigation. To that end, the PSLRA imposes more stringent pleading standards in certain private securities fraud actions, requires plaintiffs in such actions to prove that a defendant’s false statement or omission caused the loss for which they seek damages, and creates a safe harbor for certain forward-looking statements by issuers, provided that they include appropriate cautionary language.

Private Securities Litigation Reform Act of 1995.

Sarbanes-Oxley Act of 2002.

After accounting scandals at a number of major U.S. corporations in the early 2000s, Congress enacted the Sarbanes-Oxley Act (SOX) in 2002. Under SOX and associated SEC regulations, a public company’s management must assess and report on the company’s internal controls designed to ensure accurate financial disclosures. The Act also (1) requires the CEOs and CFOs of public companies to certify that their annual and quarterly reports do not contain material false statements or omissions, (2) prohibits public companies from exercising improper influence over their auditors, (3) requires public companies to disclose certain off-balance sheet activities, (4) requires public companies to establish procedures for internal reporting of suspected abuses and complaints, and (5) protects whistleblowers from various forms of retaliatory action. Finally, the Act established the Public Company Accounting Oversight Board (PCAOB) to oversee the audits of public companies.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) effected a number of significant financial regulatory changes in response to the financial crisis of 2008. With respect to securities, DoddFrank brought security-based swap agreements under the SEC’s jurisdiction. Additionally, Title IX of Dodd-Frank, also known as the Investor Protection and Securities Reform Act of 2010, (1) established the SEC’s Office of the Investor Advocate, (2) established a whistleblower award program for reporting violations of the securities laws to the SEC, (3) enhanced regulation of credit rating agencies, (4) required the sponsors of asset-backed securities to retain some credit risk of the assets they securitize, and (5) provided for additional disclosures about and shareholder voting on executive compensation at public companies.

Texas Securities Act.

The Texas Securities Act governs the regulation of the securities industry in Texas. The Act provides for the registration of securities offered or sold in Texas, and of firms and individuals who sell securities or render investment advice in the state. The Act prohibits fraud in the offer or sale of securities in Texas and in the rendering of investment advice.