Real Estate and Registered Funds

Applying investment adviser regulations to managers of real estate funds is in many ways analogous to fitting a square peg in a round hole. Effective counsel requires an intimate familiarity with the structural nuances of these vehicles.

Get in touch with our team today

Given the diverse background of our team, which includes former attorneys, accountants, administrators and regulators, our services go far beyond the scope of what many other consultancies offer. Examples of these types of value-added services include:  

  • Application of the “Howey Test” to determine whether an investment interest is a security
  • Evaluation of a fund’s portfolio composition to determine eligibility of the 3(c)(5) exemption under the Investment Company Act
  • Assistance with the identification of market comps for purposes of validating fee rates paid to affiliated service providers, such as property management companies and real estate brokers
  • Analysis concerning the conflicts of interest associated with investments in different tranches of the capital structure of the same issuer
  • Assessment of regulatory disclosure issues related to offshore vehicles used for “season and sell” and other strategies designed to limit tax leakage

For real estate firms, perhaps the most valuable component of our advice comes down to distinguishing between the relevant and irrelevant aspects of investment adviser regulation. We know that effective governance and strong compliance programs are contingent on the identification of material conflicts of interest. Given the close nature of our client relationships and frequent recurring touch points, we can keep our finger on the pulse of our client’s investment activity, and proactively raise issues related to conflicts. This enables us to pre-emptively avoid or address potential issues before they materialise.

Registered Funds

Operators and advisers of registered funds have multiple layers of regulation with which they need to comply. IQ-EQ has deep experience working with many different types of registered fund structures, including open-end mutual funds, exchange-traded funds (ETFs), closed-end funds, business development companies, unit investment trusts, collective investment trusts, UCITS and others. 

By leveraging our collective knowledge, we can advise on the nuances and practical implications of the Investment Company Act of 1940 and implement a compliance and monitoring program specifically tailored for a particular firm, trust, strategy and vehicle.

We go above and beyond simple 40 Act Compliance by helping managers and trusts think through the important operational and commercial issues, such as distribution and marketing, portfolio liquidity risk management, 15(c) processes and reporting, and more.

Key contacts