Private Equity Toolkit
Resources to assist attorneys and in-house counsel in understanding the fundamentals of private equity transactions. For a comprehensive list of available resources on this topic, see Topic: Private Equity.
A private equity ( www.practicallaw.com/7-382-3708) transaction typically involves an investment by a private equity or venture capital ( www.practicallaw.com/8-382-3901) fund and its sponsor ( www.practicallaw.com/3-382-3828) in illiquid, non-public securities issued by a private company or sometimes a public company ( www.practicallaw.com/2-382-3758) . Common types of private equity transactions include:
Start-up and early stage venture capital minority investments.
Later stage, growth equity minority investments, including:
equity investments or mezzanine investments ( www.practicallaw.com/5-382-3629) to fund business expansion;
distressed investments into financially troubled companies; and
recapitalizations to fund existing stockholder liquidity.
Private equity transactions are typically quite complex and require legal expertise and general knowledge over a wide variety of topic areas, including mergers and acquisitions, debt finance, capital markets and tax. Attorneys and in-house counsel involved in any aspect of private equity transactions should be familiar with these areas of law, as well as the current state of the private equity market.
In addition, private equity investing is becoming increasingly regulated. Of particular importance, on July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act ( www.practicallaw.com/4-502-8619) (Dodd-Frank), which imposed various measures relating to private equity and venture capital funds and the entities managing those funds. Among other changes, Dodd-Frank and the related rulemaking:
Expands the group of investment advisers that must register with the SEC.
Expands generally the jurisdiction of state regulators over investment advisers.
Requires additional recordkeeping and reporting requirements for registered investment advisers to private funds.
Mandates new examination and audit obligations for the SEC concerning private equity fund reporting.
Modifies the "Accredited Investor" and "Qualified Client" qualifications.
The Private Equity Toolkit contains resources designed to help attorneys and in-house counsel understand the fundamentals of private equity transactions, as well as resources to use when dealing with investments in this field.