© 2013 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
(October 14) – Evan Williams has recently joined Hunton & Williams in the firm’s Dallas office. Williams, who joins the firm as an associate, most recently was an outsourced general counsel and chief compliance officer for alternative investment managers, including private equity and hedge fund managers. At Hunton & Williams, his practice focuses on fund formation and regulatory compliance for alternative investment firms. He says the concept of his practice will be essentially the same, but he will be working from the outside versus as an internal member.
The Texas Lawbook conducted a Q&A with Williams to learn more about him and what’s going on in the world of alternative investment law.
TLB: Why did you make the move from being in-house at a private equity firm to an outside firm?
Williams: Prior to joining Hunton & Williams, I was actually working for another service provider which offered outsourced general counsel, CCO, and CFO services, so the focus of my practice was acting as an outsourced general counsel and CCO for multiple private equity and hedge fund firms. Prior to that, I worked in-house at a large mutual fund complex but I started my career as a fund formation attorney with another large international law firm. I think deep down I always saw myself returning to private practice once I had gotten a good understanding of the internal operations of investment advisory firms. I think that developing this skill set was crucial before returning to private practice as it will help me to better understand the day-to-day issues that my clients face in operating their businesses.
TLB: Why Hunton & Williams?
Williams: My goal upon returning to private practice is help build an industry leading alternative investment practices with a strong base in the Texas market. Hunton & Williams is well-situated to do just that. The firm has a strong corporate practice, which is supported by world-class corporate, tax, and ERISA attorneys, among others (some of whom I did work with in my prior firm). Hunton also has a sophisticated private investment funds practice, but they and I saw an opportunity to build scale in the important Texas markets, as well as expertise in the increasingly important compliance arena. All of which made for a great opportunity for me to use my skills and experience but also build something to better serve the alternative investment community in Texas.
TLB: How does this move change what do you in your law practice?
Williams: The nuts and bolts of my practice won’t change much. In my prior position, I served as an outsourced general counsel and CCO – the member of the internal team that worked closest with outside law firms and other service providers on fund formation and compliance matters. In my new role, I’ll be doing a lot of the same things, just as a member of the outside team working just as closely with our clients to help them achieve their goals.
TLB: Describe two or three of the biggest or most important deals that you have handled in time at the private equity firm.
The focus of my practice is on fund formation and regulatory compliance for alternative investment firms (including private equity funds and hedge funds). While in my previous position, the two most exciting matters I worked on were (i) helping a number of private equity managers (both established and start-up managers) register their management companies with the SEC and creating their regulatory compliance programs; and (ii) launching private equity funds and hedge funds that were spin-outs from high-profile investment management firms (including negotiating the seed deals for a couple of those funds that were seeded by well-known institutional allocators).
TLB: How have the legal needs of private equity firms changed during the past few years?
Williams: The biggest change to the legal/regulatory landscape of private equity firms was Dodd-Frank’s repeal of the exemption from investment adviser registration of which nearly all private equity firms availed themselves. Consequently, a major challenge for private equity firms (especially in the Texas market) is finding legal counsel that has both an established transactional practice and a regulatory compliance practice.
TLB: What are the two or three biggest legal needs of private equity firms going forward?
Williams: Traditionally, law firms have assisted the private equity industry with raising capital without running afoul of SEC requirements and then in deploying that capital by assisting with acquisitions of portfolio investments. Private equity firms continue to rely heavily on outside counsel to navigate the myriad domestic and international regulatory issues involved in raising and managing a fund, including tax, ERISA, and securities considerations.
In addition to the traditional needs of private equity firms, following the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act, many investment advisers to private equity firms are now required to register with the Securities and Exchange Commission. Consequently, those firms are now subject to a type of regulatory oversight from which they were previously exempt, and they need legal counsel that has experience working with the Advisers Act. Firms should seek counsel from those with direct experience in that area of the law.
TLB: The same two questions for hedge funds. What are their most important legal needs and how have the legal needs of those who operate hedge funds changed in recent years?
Williams: Seeking counsel with experience dealing with investment adviser regulation is crucial for operators of alternative investment funds. Keeping up with the ever-changing regulatory environment for investment advisers is almost a full time job in itself and fund sponsors will need legal counsel to be on top of each applicable development as they seek to remain compliant in the operation of their businesses.
Additionally, it is important for hedge fund advisers to seek counsel from those who are able to advise on matters beyond formation and regulatory compliance. Hedge fund sponsors are not only running an investment advisory firm – they are running a business and need counsel who can provide the full suite of legal services that any business may have need for, such as tax matters, labor and employment matters, banking/lending issues, ERISA issues, or litigation matters. It is for this reason that I think Hunton is well positioned to service the fund industry in Texas as we have all of those practice areas covered locally.
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