Strategic Research Sponsor of the American Bar Association's Section of International Law
Stephanie R Breslow
Office:
919 Third Avenue
10022
City:
New York
State:
New York
Country:
USA
Tel:
+1 212 756 2542
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+1 212 593 5955

Questions and Answers:

Who's Who Legal Thought Leaders: Private Funds

Stephanie R Breslow is a Schulte Roth & Zabel partner who serves as co-head of the investment management group and a member of the firm’s executive committee. She is renowned for her practice in investment management, focusing on private equity and hedge funds. Breslow has served on the Board of Trustees of 100 Women in Finance and co-authored Private Equity Funds: Formation and Operation (Practising Law Institute). She earned her JD from Columbia University School of Law, where she was a Harlan Fiske Stone Scholar, and her BA, cum laude, from Harvard University.

WHAT MOTIVATED YOU TO FOCUS YOUR PRACTICE ON PRIVATE FUNDS?

I began my career as a deal lawyer, but became more interested in building the businesses doing the deals. It is great to be on the cutting edge of investment innovation. There is also gratification in practising law from the perspective of negotiating terms that will work for both fund sponsors and investors over time, rather than simply winning points for one side.

WHAT ARE THE GREATEST CHALLENGES CURRENTLY FACING PRACTITIONERS IN THE INVESTMENT FUNDS AREA?

The regulatory environment continues to evolve, and practices that would have been considered acceptable in past years need to be re-evaluated. Investor concerns have also evolved and their sensitivity to perceived conflicts of interest has become more nuanced.

IN YOUR OPINION, WHY HAS THE LEVEL OF PRIVATE EQUITY ACTIVITY INCREASED IN RECENT YEARS?

In a low interest rate environment with low inflation, it is hard to get strong returns investing in non-distressed fixed income instruments. The stock market has been strong, but institutional investors can’t tolerate high levels of volatility over their entire portfolios.

CRYPTOCURRENCIES HAVE BECOME INCREASINGLY POPULAR IN THE LAST FEW YEARS. DO YOU EXPECT THIS TO PRESENT ANY PARTICULAR CHALLENGES TO PRACTITIONERS?

Cryptocurrencies are a particularly exciting element of my current practice. They present unique challenges because existing regulatory frameworks, as well as methods of safeguarding, auditing and transacting in assets, do not easily fit this asset class. Venture investing in this area is also fascinating, as companies spring up to extend the application of block-chain technology to new areas or to provide the types of services participants in the digital marketplace require.

HOW DO YOU SEE THE FIELD DEVELOPING OVER THE NEXT FIVE YEARS?

I think the largest fund complexes will continue to expand, and the barriers to entry for smaller sponsors will grow, both as a result of regulation and investor preference for larger teams with strong operational controls.

AS FUND STRUCTURES BECOME MORE COMPLEX, HOW IS YOUR PRACTICE EVOLVING TO MEET CLIENTS’ CHANGING BUSINESS NEEDS?

We represent many of the largest fund sponsor complexes, and there is an increasing likelihood that they are managing multiple fund products with varying investment strategies and governed by a variety of regulators. The volume of our practice on both the fund formation and regulatory side enables us to bring our clients market colour on fund terms, business structuring and regulatory challenges.

WHAT IS UNIQUE ABOUT SCHULTE ROTH & ZABEL’S PRACTICE?

Schulte is uniquely positioned because we focus primarily on the financial industry in general, and private funds in particular. We build our practice areas with this industry in mind. So, for example, our London office was opened in 2002 to handle UK fund formations and to give regulatory guidance to sponsors, from the US and other jurisdictions, who plan to open offices or to market in the UK and Europe. Similarly, our DC office was created in 2008 to address securities regulatory and enforcement issues facing financial services industry clients. In our main office in New York, all practice areas are sensitive to the particular issues faced by fund sponsors and investors. We also have a dedicated fund compliance practice, a dedicated AML team, a broker/dealer group that understands fund marketing issues – we are a one-stop shop for this industry.

WHAT ADVICE WOULD YOU GIVE TO YOUNGER PRACTITIONERS LOOKING TO SPECIALISE IN PRIVATE FUNDS?

The best fund lawyers understand their clients’ businesses, so young lawyers should read the financial press and trade publications as well as following the law. Be nimble – this is a practice that values practical, thoughtful advice, and in which important decisions need to be made quickly. And never lose sight of the fiduciary overlay – issues need to be viewed through the eyes of the sponsor, but also the investor and the regulator.

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