For many emerging fund managers, exempt reporting adviser (“ERA”) status is the best starting point. However, many fund managers mistakenly assume they should start off as a registered investment adviser (“RIA”) or should remain an ERA even after their activities and strategies change. The question first arises at Fund I, but it’s a recurring question...
ERA vs RIA: When Private Fund Managers Should Make the Switch
During an initial client consultation with fund managers, one of the first questions we ask is deceptively simple: “How large do you want the fund to be” or “How much are you raising?” When we ask why, the conversation can quickly become very interesting as the target set by the fund manager can be driven...
In today’s market, fund managers regularly find themselves needing additional capital and thinking they should send a capital call notice to existing investors. This sounds simple, and sometimes this is the right approach, but often what the fund manager wants is not a capital call at all and is actually a new offering. The consequences...