As co-chair of the investment funds practice, Y Shukie Grossman represents sponsors in structuring and negotiating terms of domestic and offshore private funds. He also negotiates employment/economic sharing arrangements among management team members; advises on the acquisition and sale of minority and majority stakes in sponsors, as well as spin-outs of fund businesses and management teams; and represents institutional investors in investing in private funds. He spent several years at the Division of Investment Management of the SEC and is an adjunct professor at Columbia Law School.
What attracted you to a career as a private funds practitioner?
Private funds is among the most intellectually challenging of all corporate practice areas, in that it amalgamates a number of different disciplines – such as capital markets, M&A, tax and labour. It’s also the case that the private funds industry has historically attracted some of the most sophisticated and successful individuals in the financial sector, making client interactions intriguing and exciting.
Having started your career as an attorney in the US Securities and Exchange Commission, what led you to enter private practice?
From the very outset of my career, I knew that the private sector could offer me the greatest diversity of experience and challenge. Government service provided an excellent window into the industry and an unparalleled means by which to accumulate a trove of regulatory knowledge, but my long-term goal was always to apply that knowledge to the representation of clients.
What aspects of your previous governmental experience have helped you in your current role and how?
Though I’ve been in private practice for 20 years, I’ve retained a keen awareness of the regulatory framework that the US Securities and Exchange Commission applies to asset managers. The regulatory mindset is also less of an enigma to me than to many other practitioners. These attributes have served me well in advising clients as the private funds industry has become subject to greater regulatory scrutiny.
What is the greatest challenge currently facing the sector? How has your firm prepared to meet this challenge?
The increase in regulatory oversight of private fund sponsors in the US is a change that has fundamentally altered the way in which such sponsors conduct business. When I departed the US Securities and Exchange Commission two decades ago, private funds were only marginally on the Commission’s agenda. Through a series of rule changes, today, the Commission has increased oversight over private fund sponsors and has made enforcement a priority. Our firm is incredibly well positioned to address this development – primarily because our private funds practice has a deep bench of seasoned practitioners who work alongside some of the most highly regarded regulatory and enforcement practitioners in the US.
Have any jurisdictions become more active over the past year? If so, how has your firm prepared to assist clients there?
We have seen an increase in appetite for US investment funds from both Asian and European investors. To meet this demand, we continue to develop state-of-the-art structures that allow our US-based fund sponsor clients to avail themselves of this capital.
As co-chair of the investment funds practice group at Gibson Dunn & Crutcher, what will be your main priorities over the next year regarding the development of the team?
We’re continuing to focus on further expansion of our global capabilities to meet the needs of clients with broadening global footprints. Part of this process is ensuring that our private funds practice can service the increasing regulatory needs of clients no matter where they establish offices, raise capital or make investments.
How do you differentiate yourself from other practices?
Our practice focuses on cultivating strategic relationships with clients. Fund formation often serves as a point of entry into our firm and many of our fund formation clients also work with an array of practice groups, including private equity, real estate, infrastructure, finance, tax, capital markets, intellectual property and litigation. In addition, our practice emphasises extensive partner involvement throughout the fundraising process in order to ensure efficient navigation of an ever-more-complex fundraising environment and to develop the type of strategic relationships that that we believe are of mutual benefit to our clients and to our firm.
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