Mitigating Risk in the Merchant Cash Advance Industry: Recognizing and Managing a Looming Threat Apr17

Posted by & filed under Legal, Regulatory, White Papers/ Thought Pieces.

The pursuit of non-correlated, investable, high-returning assets has led private funds to consider ever more esoteric asset classes for possible investment. Merchant cash advance transaction contracts (“MCATs” for short), are one of those receiving the attention of the hedge and private equity industries. MCATs are, in their basic form, an unregulated futures contract for the present purchase of a portion of a merchant’s future receivables. Properly structured, they provide the benefit of discount pricing in the purchase of a financial asset (similar to a factoring arrangement), where that asset — the receivables to be created — does not yet exist

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How Can Emerging Managers Better Align with Investors: A Strategic Comparison of Private Investment Fund Models Aug9

Posted by & filed under Hedge Fund Marketing, Legal.

Our law firm, Pepper Hamilton, regularly advises prospective private equity and hedge fund managers on the various legal structure options associated with launching a new private investment fund. In our experience, first-time fund managers often have preconceived notions of how their new fund should be structured and what economic and liquidity features, capital commitments, investment horizon and other terms the fund should have. Such preconceived notions, however, frequently evolve based on further exploration of the different fund structure options available and which structures better align with investor interests given the fund’s underlying investment strategy and return objectives

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