Episode 63: Hedge Fund Offering Terms, Part 2: Liquidity

Today is the second in a series of Tokens of Wisdom episodes walking through the main offering terms for an open-ended fund, aka a hedge fund.

One of the first things I do with new fund clients is take them through a fund questionnaire to determine the offering terms for their new fund. This is usually a one hour conversation, at the end of which I have most of what I need to draft the fund’s offering documents. Since I know ToW listeners like it short and sweet, I’m going to break this up into a handful of different episodes.

Today’s episode discusses liquidity terms.

Key Points From This Episode:

• How do hedge fund managers think about liquidity provisions?
• What’s the tension between manager and investor?
• Common liquidity restrictions/mechanisms.
• What variables are relevant for each mechanism?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal, investment or tax advice. The guests that join us are sharing their considerable fund-related wisdom, but everything they share here is their personal opinion and for educational purposes only. On this show, they are speaking for themselves, and not for their employer or any affiliated entity.

Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 62: Sharing the Wisdom (Salman Ali)

When I set out to do this show, my goal was to arm aspiring fund managers with the information they need to launch and operate a fund.

In the legal realm, I happen to possess a lot of that information from my day job, but there’s so much more that goes into launching and operating a fund. And wise though I may be, my area of expertise doesn’t cover it all. So I’m going to bring in some friends to share their wisdom in various other aspects of fund management.

I am honored to have Salman Ali from CBIZ on the show today to tell us all about fund audits!

Key Points From This Episode:

• What does the fund audit process entail?
• What are level 1, 2, and 3 assets? Why does it matter for an audit?
• How do auditors charge for their services?
• What does auditor independence mean?
• What kind of info does the auditor need to complete its work?
• How do auditors charge for their services?
• How to choose the right auditor for your fund?
• What’s the smartest thing a new fund manager can do?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal, investment or tax advice. The guests that join us are sharing their considerable fund-related wisdom, but everything they share here is their personal opinion and for educational purposes only. On this show, they are speaking for themselves, and not for their employer or any affiliated entity.

Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Salman Ali - https://www.linkedin.com/in/salmanali310/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

CBIZ - https://www.cbiz.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 61: Hedge Fund Offering Terms, Part 1: Compensation

Today is the first in a series of Tokens of Wisdom episodes walking through the main offering terms for an open-ended fund, aka a hedge fund.

One of the first things I do with new fund clients is take them through a fund questionnaire to determine the offering terms for their new fund. This is usually a one hour conversation, at the end of which I have most of what I need to draft the fund’s offering documents. Since I know ToW listeners like it short and sweet, I’m going to break this up into a handful of different episodes.

Today’s episode discusses compensation terms.

Key Points From This Episode:

• How are fund managers typically compensated?
• What’s a management fee? What’s a performance allocation?
• What variables are relevant for each?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal, investment or tax advice. The guests that join us are sharing their considerable fund-related wisdom, but everything they share here is their personal opinion and for educational purposes only. On this show, they are speaking for themselves, and not for their employer or any affiliated entity.

Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 60: Sharing the Wisdom (Bert McCooey)

This is an exciting day in Tokens of Wisdom history! Not only do you get to see my real-life face, but you also get the unparalleled wisdom of Bert McCooey from Ascent Fund Services.

When I set out to do this show, my goal was to arm aspiring fund managers with the information they need to launch and operate a fund.

In the legal realm, I happen to possess a lot of that information from my day job, but there’s so much more that goes into launching and operating a fund. And wise though I may be, my area of expertise doesn’t cover it all. So I’m going to bring in some friends to share their wisdom in various other aspects of fund management.

I am honored to have Herbert “Bert” McCooey from Ascent as my inaugural guest to tell us all about fund administration!

Key Points From This Episode:

• What does a fund admin do? Let’s get granular!
• Why do I need one?
• How do fund admins charge for their services?
• What is reputational risk for an LP in a fund?
• Was Bert’s best friend as a child named Ernie?
• What’s the best thing a new fund manager can do?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Bert McCooey - https://www.linkedin.com/in/bert-mccooey-a6b24414/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Ascent - https://www.theascent-group.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 59: Peeling Layers

At the federal level, the tables are turning faster than at a vintage Tiesto performance: it’s honestly hard to keep up with how quickly the federal government has done a total 180 on crypto.

Key Points From This Episode:

• What was the now-disbanded National Cryptocurrency Enforcement Team?
• How is the United States similar to an onion?
• What’s happening beneath the federal layer, at various state regulators?
• NY, CA and OR flexing their enforcement muscle to the collective groan of the crypto industry.

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 58: Yet Another CTA Update (Yawn)

Last time I spoke to you about the CTA, I said I wanted to discuss it about as much as I wanted a hole in the head. A little over a month later, nothing has changed. In my mood that is.

But alas, much has changed in the world of required BO reporting, so here I am standing in front my mic and talking about it again.

Key Points From This Episode:

FinCEN’s New Interim Final Rule.

• Who’s in scope?
• Who’s out of scope?
• What are the new deadlines?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 57: Fixing the Hole in Your Net (And More!)

If you thought the kinder, gentler SEC was only going to be kinder and gentler to the crypto community, you thought wrong. Today I’m going to briefly summarize two recent SEC actions that relaxed marketing-related rules: clarifying requirements for marketing materials and elements of 506(c).

Key Points From This Episode:

• What is the SEC’s marketing rule?
• What are case studies?
• SEC FAQ from early 2023 muddies the waters.
• The trouble in calculating case studies net of fees and expenses.
• SEC FAQ from March 2025 clarifies things.
• What’s all this about 506(c)?

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

New FAQ: https://www.sec.gov/rules-regulations/staff-guidance/division-investment-management-frequently-asked-questions/marketing-compliance-frequently-asked-questions

506(c) No Action Letter: https://www.sec.gov/rules-regulations/no-action-interpretive-exemptive-letters/division-corporation-finance-no-action/latham-watkins-503c-031225

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Episode 56: Interpretive Clarity.

By now, you’ve probably heard the latest news from the sunshine and rainbows SEC: Meme coins are not securities! This is great news for the crypto community, which has a little more clarity today on how the SEC will interpret securities laws as they apply to digital assets.

But is this the regulatory clarity we’ve long clamored for? Not quite…

Key Points From This Episode:

• What does the SEC’s Meme Coin Statement say?
• Reasons to be excited.
• Reasons to temper excitement.
• The difference between regulatory clarity and interpretive clarity.
• Comparing and contrasting SEC reasoning today, vs SEC reasoning way back when (18 months ago).

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

SEC Meme Coin Statement: https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com