Corporate Structuring and Fundraising for Single Purpose Vehicles
Created on January 25, 2017
What do securities syndications and fundraising for real estate, restaurant ventures, film ventures, theme parks and a variety other project finance opportunities have in common?
The answer is simply the often overlooked and misunderstood "SPV." Essentially, the SPV or "Single Purpose Vehicle" is an entity that is structured to take in investor monies towards funding a singular dedicated project or opportunity. Indeed, a great majority of real estate finance projects, and a variety of other project finance opportunities essential to the U.S. economy, are at least partly funded by SPVs. Furthermore, with the advent of crowdfunding and "general solicitation" under the JOBS Act, the SPV's role in financing a variety of projects and operating companies cannot be overstated.
This program focuses on structuring SPVs to undertake capital raising by and through the sale of private securities, across a variety of industry verticals, including but not limited to real estate. In addition, the program discusses private offerings in general and the typical terms and conditions that apply to such offerings in and around the SPV universe. Unlike the many primer discussions of capital raising and securities focused on corporate startups, this program examines the fundamentals of structuring and offering of securities in an entity that is dedicated to a singular project (or singular outcome).
Hence, considerations that are not typically present in the capitalization of going concerns (e.g., Google), such as waterfalls, management performance fees, asset management fees, investor performance metrics and compensation structures, and a variety of other terms and issues unique to this context are covered in detail.
This course, presented by Kaiser Wahab, partner in the law firm of Riveles Wahab LLP, which is dedicated to private securities offerings in the hedge fund, private equity, and early-stage/venture-capital spaces, is designed to arm the practitioner with the vocabulary, skill set, and overall understanding of what makes these companies unique and powerful in the capital raising landscape (especially in contrast to "price rounds" for going business concerns, such as a so-called "Series A").
- Learn how to identify those instances where the SPV approach or structure is warranted and/or preferred
- Identify usage scenarios for SPVs that are not immediately apparent, including as a "feeder" for an ongoing business concern or a separately syndicated opportunity
- Recognize best practices as to entity structure and SPVs, including entity selection, typical entity charter documents, agreements, etc.
- Understand the role of various players in the SPV transaction pipeline, including but not limited to promoters, managers, investors, placement agents, etc.
- Grasp common compensation and return structures from both the investor and promoter/manager perspective, including but not limited to waterfalls, performance fees, asset management fees, and variations thereon, including catch ups, clawbacks, etc.
- Explore how equity classes can be used in SPVs
- Comprehend the interplay of the private placement of securities, under applicable private securities regulations, with SPVs, including but not limited to Regulation D-Rule 506C, Regulation CF, etc.
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