Investment into and and Joint Venture with Hong Kong Private Equity Real Estate Manager
Our Mergers and Acquisitions Practice and our Private Equity Practice advised a New York based hedge fund and private equity funds manager on an investment into a Hong Kong based private equity real estate fund sponsor with US$450 million of assets under management. The investment marked the beginning of a joint venture and the launch of a new private equity real estate fund with an Asian based family business taking an anchor investor role in the new fund.
We guided the client through legal due diligence, including a review of portfolio investments in the fund managed by the sponsor and a review of compliance with regulatory obligations as the Hong Kong private equity real estate sponsor was licensed by the Securities and Futures Commission (“SFC”).
We represented the client through extensive negotiations in respect of:
terms of investment into the Hong Kong based private equity sponsor;
a shareholders agreement between the US based hedge fund and private equity manager and the Hong Kong based private equity sponsor with particular focus on deadlock, exit, post-exit restrictive covenants, post-exit split of limited partner (“LP”) relationships and post-exit split of carried interest;
an executive service agreement with the key principal of the Hong Kong based private equity sponsor with particular focus on post-termination non-solicitation and non-compete clauses; and
a term sheet for the new private equity real estate fund and a side letter in respect of the investment by the Asian based family office into the new fund.