Darian regulatory platforms (031813)

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Darian regulatory platforms (031813)

  1. 1. EU and USA Regulatory Platforms201 Penn Center Blvd. | Ste. 400 | Pittsburgh, PA 15235 info@dariancs.com | http://www.dariancs.com 888-400-4066
  2. 2. Regulatory Problem 1 - AIFMDThe member countries of the EU are quickly implementing the Alternative Investment Fund ManagersDirective (AIFMD).• Covers virtually any activity of all non-UCITS investment funds and their advisors, including merelyhaving EU based investors.• Considered more restrictive than Dodd-Frank, regulatory mandates mimic those of UCITS or mutualfunds, which include Form PF-style reporting, depository requirements, and compensation limits(including for offshore funds/managers).• Favors EU based funds and advisors for at least 5 years (and likely beyond) by exclusively granting them a“passport” to market throughout the EU under a single AIFMD registration and regulatory regime. BeginsJuly 2013.• All others must market through, and be subject to, country-by-country private placement regimes, whichare quickly disappearing—including the EU’s largest market, Germany. Member nations are permitted totreat non-EU funds/managers more harshly than their AIFMD-approved neighbors, and are doing so by,for example, eliminating the reverse solicitation exception or banning offshore funds altogether (see,Holland, Italy, Germany, and France).• The intent now and into the future is clear—the EU wants as much in the EU as possible, and willcontinue to make it hard to do otherwise.• Upside to regulation? Access to EU institutional investors which cannot allocate to unregulated vehicles.
  3. 3. The Darian CapitalDarian Capital Services Solution Platform Fund Darian Capital Darian CapitalExisting and future European Management, LLC Management, LLCinvestors of the offshore fund investin Darian Capital’s AIFMD compliant (SEC Advisor/Delegated (SEC Advisor/DelegatedUmbrella Fund through white-labeled Portfolio Manager) Portfolio Manager)sub-cell, which allocates to thedesignated offshore fund.Benefits to Client Darian Capital Europe Darian Capital Europe• No need to independently suffer Offshore Fund’s EU Offshore Fund’s EUexpense and delay to set up (Dublin-based, Self-Managed (Dublin-based, Self-Managed Investors Investorsoperations in Europe. Umbrella Fund) Umbrella Fund)• No direct AIFMD complianceresponsibility and little regulatory White White White Whiteimpact on operations. Labeled Labeled Offshore Fund’s Offshore Fund’s Labeled Labeled Offshore Offshore Offshore Offshore Marketers Marketers• “Passport” to market to all of EUunder single regulatory regime Fund Cell Fund Cell Fund Cell Fund Cell(including to retail investors in someEU countries) and avoid hostilecountry-by-country regimes.• Fund cells under the Umbrella Fundare fully segregated, legally distinct Offshore Offshore Offshore Offshoreentities reserved for each reference Fund Fund Fund Fundoffshore fund. No overlappingliabilities.
  4. 4. Regulatory Problem 2 – Dodd FrankThe Dodd-Frank financial reform act requires many non-U.S. advisors to register withthe SEC, make certain financial disclosures (Form ADV for Registration and Form PF if aprivate fund manager), and establish and maintain a regulatory compliance program.Dodd-Frank impacts non-U.S. fund mangers who have:• 15 or more clients in the U.S.;•$25 million or more is assets attributable to those clients ($150 million if solely aprivate fund manager); or• Held selves out as an advisor to the general public of the U.S.
  5. 5. The Darian Capital Platform FundDarian Capital Services Solution Darian Capital Darian Capital Darian Capital Darian Capital Management, LLC Management, LLC Services, LLC Services, LLCExisting and future U.S investors ofthe non-US fund/manager invest in (SEC Advisor/Delegated (SEC Advisor/Delegated (Compliance Advisor) (Compliance Advisor)Darian Capital’s SEC compliant Portfolio Manager) Portfolio Manager)Advisor and Umbrella Fund, whichallocates back to the Client funds. Darian Capital Europe Darian Capital EuropeBenefits to Client Non-US Fund’s US Non-US Fund’s US• No direct SEC compliance (Dublin-based, Self-Managed (Dublin-based, Self-Managed Investors Investors Umbrella Fund) Umbrella Fund)responsibility, which is outsourcedto Darian Capital Services.• Ability to market to the U.S., White White White Whiteincluding through general Labeled Labeled Labeled Labeled Non-US Fund’s Non-US Fund’ssolicitations upon implementation Non-US Non-US Non-US Non-US Marketers Marketersof the JOBS Act. Fund Cell Fund Cell Fund Cell Fund Cell• Fund cells under the UmbrellaFund are fully segregated, legallydistinct entities reserved for eachreferenced Non-US fund/manager.No overlapping liabilities. Non- US Non- US Non-US Non-US Fund Fund Fund Fund
  6. 6. Our PeopleDaryoush Niknejad, JD - Managing MemberDaryoush Niknejad is a investment advisory attorney who has served in-house and as outside counsel toregistered investment advisors, venture capital firms, private equity firms, and broker-dealers. Mostrecently, he was Managing Director of Blue River Partners and its subsidiary, Steelbridge Compliance,where he filled the general counsel and chief compliance officer roles for numerous publicly registeredand private fund managers, including BDCs, CLOs, and traditional hedge funds and private equity funds.Prior to that, he was Associate General Counsel at Highland Capital Management, L.P., a multi-billiondollar investment advisor responsible for some of the world’s largest distressed asset funds, as well asvarious retail and private hedge funds, CLOs, and real estate funds. While at Highland, he helpeddesign, build-out, and test the firm’s compliance platform while also advising on derivatives trading,litigation management, and myriad strategic relationships and agreements. Mr. Niknejad also served asAssociate General Counsel at IP Navigation Group, LLC, a technology-focused private equity firm, wherehe was also General Counsel to its various portfolio companies. While at IP Nav, he was the soleattorney responsible for technology licensing, due diligence, and regulatory compliance.He is a graduate of UCLA and the University of Texas School of Law, and a member of Texas andCalifornia bars.
  7. 7. Our PeopleNathan J. Hard, JD – European CounselMr. Hard is a New York State licensed attorney, who has been an independent consultant in Germanysince 2006. He has advised European based law firms, financial institutions, advertising and publishingfirms, and cutting-edge technology companies on the interaction between United States law and thelaws of the European Union and its member countries, including on issues relating to corporate entityformation and regulation and appropriate fund structures. He has also advised non-European Unionbased entities on establishing operations in Europe, while maintaining tax efficiency and navigatingmarketing regulations.Prior to moving to Europe, Mr. Hard was an associate at Rivkin Radler LLP in New York where he advisedFortune 500 companies on contract disputes, insurance matters, toxic tort, and environmental issues.He was also an associate with Sandbote & Waggoner, P.C. in Dallas, Texas where he representedregional and national insurance carriers.Mr. Hard resides in Berlin, Germany with his wife and children, and is fluent in German language andbusiness culture. In addition to his professional pursuits, he volunteers with Lawyers Without Borders,an organization that provides pro bono legal services for the advancement of the rule of law andeconomic development throughout the world.Mr. Hard is a graduate of Tulane University and the University of Texas School of Law.
  8. 8. Our PeopleLegal CounselPaul Farrell – Partner, Walkers IrelandPaul Farrell is a partner in Walkers’ Global Investment Funds Group and is based in the Dublin office.Paul specializes in the legal and regulatory issues surrounding the establishment and maintenance ofIrish mutual and alternative investment funds structured as UCITS funds, non-UCITS retail funds,professional investor funds (PIFs) and qualifying investor funds (QIFs) including exchange traded funds(ETFs), managed-account platforms, money market funds, master-feeder funds, alternative investmentfunds and the re-domiciliation of funds to Ireland.Prior Employment ExperiencePrior to joining Walkers, Paul was a senior partner in the Asset Management practice of a big five Dublinlaw firm leading its alternative investment arm. Paul has been advising on legal and regulatory issues inthe Irish funds industry for over 13 years.Boards And AssociationsPaul is a member of the Incorporated Law Society of Ireland.

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