Leveraging more than twenty years of experience serving clients in the financial sector, our firm has carved out a strong standing as the preferred organisation for businesses in search of tailored and inventive legal guidance in the hedge fund sphere.
Our firm is heavily focused on financial services, including portfolio management, broking and dealing, financing, electronic trading and clearing, custody and derivatives trading. We bring a deep understanding of Hong Kong laws affecting the full spectrum of the business activities in which hedge funds engage.
We have been advising hedge funds and their managers on Hong Kong requirements for over 15 years. Our clients have ranged from start-ups to bulge bracket investment managers with over US$60 billion of assets under management.
WHAT WE CAN DO FOR YOU
Armed with deep insights into our client's industries, Timothy Loh LLP is ready to navigate you through the legal complexities with the following:
Regulatory Framework
We represent hedge funds and fund managers on regulatory issues throughout the entire fund life cycle.
We can advise you on the following:
Establishment of a management group, including incorporation of Hong Kong manager vehicle
Licensing applications to the Securities and Futures Commission (“SFC”)
Preparation and negotiation of agreements between key principals and shareholders and share option schemes with key executives
Compliance with regulatory restrictions in respect of the offer of hedge fund interests, including the private placement and professional investor exemptions from SFC authorization requirements, point of sales related regulations and anti-money laundering (“AML”) related requirements
We bring our depth of experience and a steadfast commitment to integrity to every interaction, ensuring clarity and openness in our communication.
Fund Structuring
We represent hedge fund managers in the formation and operation of fund vehicles. Our services include:
Choice of fund vehicle jurisdiction and form, including Hong Kong open-ended fund companies (“OFCs”), limited partnership funds (“LPFs”) as well as Cayman and other offshore exempted limited liability company and segregated portfolio cell (“SPC”) structures,
Preparation of investment management agreements (“IMAs”)
Capital raising by preparing term sheets, private placement memoranda (“PPMs”), and subscription agreements and negotiating and preparing side letters
Our dedication to a client-first approach means we focus on crafting solutions that best align with your financial objectives.
Regulatory Defence
We can help you with the following:
SFC inspections and field audits
SFC enquiries, investigations and enforcement action
Client complaints and legal proceedings in connection with portfolio positions
We have a commitment to resolve disputes efficiently and favorably.
We routinely represent clients in SFC investigations and prosecutions which test the limits of Hong Kong securities laws. We are fully conversant with the boundaries and complexities of the legal and regulatory framework under the Securities and Futures Ordinance ("SFO").
grounded regulatory
COMPLIANCE
Regulatory Framework
We represent hedge funds and fund managers on regulatory issues throughout the entire fund life cycle.
We can advise you on the following:
Establishment of a management group, including incorporation of Hong Kong manager vehicle
Licensing applications to the Securities and Futures Commission (“SFC”)
Preparation and negotiation of agreements between key principals and shareholders and share option schemes with key executives
Compliance with regulatory restrictions in respect of the offer of hedge fund interests, including the private placement and professional investor exemptions from SFC authorization requirements, point of sales related regulations and anti-money laundering (“AML”) related requirements
We bring our depth of experience and a steadfast commitment to integrity to every interaction, ensuring clarity and openness in our communication.
creative financial
SOLUTIONS
Fund Structuring
We represent hedge fund managers in the formation and operation of fund vehicles. Our services include:
Choice of fund vehicle jurisdiction and form, including Hong Kong open-ended fund companies (“OFCs”), limited partnership funds (“LPFs”) as well as Cayman and other offshore exempted limited liability company and segregated portfolio cell (“SPC”) structures,
Preparation of investment management agreements (“IMAs”)
Capital raising by preparing term sheets, private placement memoranda (“PPMs”), and subscription agreements and negotiating and preparing side letters
Our dedication to a client-first approach means we focus on crafting solutions that best align with your financial objectives.
pragmatic
DISPUTE RESOLUTION
Regulatory Defence
We can help you with the following:
SFC inspections and field audits
SFC enquiries, investigations and enforcement action
Client complaints and legal proceedings in connection with portfolio positions
We have a commitment to resolve disputes efficiently and favorably. We routinely represent clients in SFC investigations and prosecutions which test the limits of Hong Kong securities laws. We are fully conversant with the boundaries and complexities of the legal and regulatory framework under the Securities and Futures Ordinance ("SFO").
Let us arrange an appointment with our award-winning lawyers for your case
Contact UsFREQUENTLY ASKED QUESTIONS
We set out below some of the common concerns our clients encounter in the set-up of hedge funds in Hong Kong and how we can help address those concerns.
Q1: Do I need an SFC license to manage a hedge fund in Hong Kong? Do I need an SFC license to raise capital in Hong Kong for my hedge fund? Am I exempt from SFC licensing requirements if my fund only targets professional investors?
We have a solid understanding of the licensing requirements under the SFO. We assess your proposed business activities and advise on whether you need an SFC license and if so, whether you need an SFC license for Type 9 (asset management) or an SFC license for Type 1 (dealing in securities).
We have advised hedge fund management groups on the possible availability of the intra-group exemption from Type 9 licensing and the possible use of the professional investors exemption (“PI Exemption”) from Type 1 licensing.
In addition, we can help assess whether the active marketing provisions of the SFO, which extend the SFC licensing requirements to certain conduct and activities outside Hong Kong, may apply to you if you are targeting Hong Kong investors.
Q2: Do I qualify for an SFC license? What qualifications and experiences do I need? Do I need to take exams? Will I be approved as a responsible officer (“RO”)? How to meet the RO requirements? What is the test for an RO?
We have extensive experience assisting hedge fund managers in applying for SFC licenses. Our clients benefit from our vast knowledge of the SFC licensing process accumulated over the years.
We have a thorough understanding of SFC licensing requirements, such as the “fit and proper” and competence tests. We are familiar with the various factors which the SFC will have regard to when assessing your SFC license application.
We evaluate your individual background and your proposed business activities to help you prepare an application to meet all the applicable regulatory requirements and improve your chance of success of being approved, whether as a licensed representative or as a responsible officer.
We actively help you pre-empt any potential concerns which the SFC may have and address any issues before they arise to ensure the greatest chance of a smooth and quick grant of the SFC license.
Q3: Do I need an agreement with my partner or anchor investor? What is a shareholders agreement?
We help you think through how the hedge fund management group should be governed if there are 2 or more key partners or stakeholders in the group. We guide you through the decisions that you may need to make to avoid future disputes and to protect your interests, in the event that your relationship with partners or key stakeholders deteriorates. We can review or prepare investment agreements by which seed investors take a stake in the management group or by which you and one or more partners agree to work together to launch the fund.
We have extensive experience advising on the types of issues which you may face in these situations including as regards voting rights, the distribution of profits, deadlock in decision making, restrictive covenants and the “ownership” of investors in the event of a subsequent breakup of the partnership.
Learn more about Hedge Funds in our FAQ page
FAQHOW WE OPERATE
Our pursuit of excellence anchors the firm's sophisticated approach.
We blend steadfast professionalism with our relentless dedication, enabling us to provide exceptional legal services.
Our practices are encapsulated within these domains:
Formation
Formation
We streamline the incorporation of your fund's manager, licensing applications to the SFC, and negotiation of agreements between key principals. We diligently craft shareholder agreements and share option schemes with key executives.
Capital Raising
Capital Raising
We can guide you in the selection of fund vehicle and in our preparation and negotiation of key fund documents. We meticulously draft private placement memoranda, subscription agreements and side letters, safeguarding your interests and maintaining absolute transparency in all dealings.
Portfolio Investments
Portfolio Investments
We advise on the effect of Hong Kong laws on Hong Kong listed company transactions and on compliance viability in proposed portfolio transactions, taking into account insider dealing and market manipulation laws.
Compliance
Compliance
We support your fund's journey throughout its life cycle. We help tackle ongoing operational related regulatory challenges. Our unwavering dedication and proactive approach ensure your fund operations run smoothly, affirming our client-first approach, integrity and clear communication. We are committed to ensuring that your fund's operations continue to run smoothly, regardless of the challenges faced. We handle potential disputes and regulatory inspections, enquiries and enforcement action with a pragmatic, results-oriented approach.
In Hedge Funds, our practice has been recognised by:
“One of the World's Leading Practitioners”
“Leading Practice”
“Leading Practice”
“Recommended Practice”
“Leading Individual”