The hedge fund business has an extensive reach, with fund managers and investors active globally. A hedge fund is a pooled investment vehicle that “pools” private capital for investment in marketable securities and other liquid instruments. Unlike mutual funds, hedge funds are largely unregulated and are not required to register with the Securities and Exchange Commission; thus, a hedge fund is not subject to the several diversifications and other restrictions that limit a mutual fund’s investment discretion. In addition, hedge funds are open-ended, accepting subscriptions from investors at regular intervals and allowing investors to achieve liquidity in the form of periodic redemptions.
Maximizing tax-efficient returns for hedge fund managers and investors requires careful tax planning on the formation of a fund. This course introduces the tax considerations germane to hedge fund structuring and the key tax implications for the fund, various investor types, and fund managers.
Recognize the key differences between an open-ended fund and a closed-ended fund
Identify the main fund classification options and issues for hedge funds
Gain an overview of the tax considerations and objectives of key investor categories, including U.S. taxable investors, U.S. tax-exempt investors, and non-U.S. investors
Discuss the tax considerations and objectives of fund managers
Examine the “plain vanilla” hedge fund master-feeder structure
Xenia Garofalo is a tax associate resident in Fried Frank's Washington, DC office.
Ms. Garofalo provides tax and structuring advice for a wide range of clients (including institutional and global investors, fund sponsors, and multinational companies) on U.S. tax matters related to their structuring, operation, investment activities, and transactions. She routinely advises clients on the tax aspects of forming and investing in private funds, including hedge funds, real estate funds, credit and debt funds, and private equity funds.
Ms. Garofalo routinely serves as a guest speaker at Howard University School of Law, where she was also an adjunct professor on the topic of corporate tax law. Ms. Garofalo frequently contributes to client memoranda on tax law changes and co-authored Key Tax Factors To Consider Before Accepting PPP Loans, Law360 (May 21, 2020). Ms. Garofalo regularly engages in community service and serves on the Board of Directors of the Northern Virginia Family Service.Ms. Garofalo received her JD, cum laude, from Howard University Law School of Law in 2010, and her BA from La Sierra University in 2006. She is admitted to practice in the District of Columbia and New York.
Colin S. Kelly is a tax partner resident at Fried Frank's New York office.
Mr. Kelly provides tax counsel with a focus on asset management, including advising investment funds and their portfolio companies on a variety of complex international and domestic transactions, particularly in connection with the formation of funds and fund managers, joint ventures, divestitures, mergers and acquisitions, and "seed" and "stake" investments in fund managers.
Mr. Kelly has significant experience representing clients on a broad range of tax issues relating to investment funds, qualified opportunity zone investments, public and private C corporations, S corporations, partnerships and LLCs, individuals, inbound and outbound cross-border investments, foreign governments, and sovereign wealth funds, bankruptcies and restructurings, and financial products.
In addition to his regular client representations, Mr. Kelly has conducted diverse and significant pro bono work, including representing clients in tax controversies, advising charitable organizations on various 501(c)(3) issues, and representing Edith Windsor in her landmark civil rights victory overturning the Defense of Marriage Act (DOMA) in the U.S. Supreme Court.
Mr. Kelly’s recent publications include:
Select Issues for Structuring Qualified Opportunity Funds, Private Equity Law Report (June 4, 2019);
INSIGHT: Proposed Opportunity Zone Regulations—The Sequel, Bloomberg Tax (April 30, 2019)
This was way over my head, but I was glad to finally be exposed to the information. Excellent faculty.
Would love to see a Part II where the rest of the slides are covered.
Xenia was very informative, and did a fantastic job with the course.
Great content, great speakers, highly recommend for others.