The Legal 500

Dechert LLP is roundly considered ‘a dominant player in investment management, with a huge presence in the mutual funds sector’. 25 partners spread throughout Washington DC, New York and Boston make mutual funds their primary focus, with each one offering ‘great depth of knowledge and team strength for all matters but particularly for 1940 Act issues’. Internationally some 140 lawyers help generate the critical mass the team needs to cater to its client base of 50 mutual fund groups, with some of the top clients managing assets ranging from $100bn to $1.5 trillion. The team’s ‘first-class representation’ spans fund formation, regulatory compliance and litigation, with a track record of involvement in cutting-edge products and cases. On the contentious front, the team provided an amicus curiae brief in the US Supreme Court case Janus Capital Group v First Derivative Traders, a case relating to the proper scope of the implied private right of action under section 10(b) of the Securities Exchange Act 1934. It also represented the Investment Company Institute as amicus curiae in In Re Charles Schwab Corp Securities Litigation, which presented serious questions regarding the ability of a fund to change or interpret a fundamental policy on concentration of investments. Highlights for new clients included serving as counsel to a family of 84 funds sponsored by a leading brokerage firm, and advising an investment banking/brokerage firm on acquiring an investment adviser with a portfolio of mutual funds, private funds and separate accounts. Following the significant expansion of the team in 2009, 2010 saw it promote to partner Thomas Bogle and Kevin Cahill, and hire Holland West, former global head of hedge funds and structured finance at Shearman & Sterling LLP. The group’s ‘extremely capable, experienced and professional attorneys’ are widely praised, with special mention reserved for co-chairs Robert Helm and Joseph Fleming, as well as Ruth Epstein and ‘go-to lawyers’ Sander Bieber and John O’Hanlon, who give ‘crisp, reliable advice’.

K&L Gates fields 65 investment management partners globally, the vast majority of which are spread across its US offices, and it has an eminent reputation for 1940 Act and broader regulatory matters. Its strong focus on client service has endeared it to funds and independent directors, who also value the ‘strength in depth’ of the team, as well as its ‘timely responses and analysis’. Following its absorption of Bell, Boyd & Lloyd in 2009, 2010 saw the practice bedding in and solidifying its significant transactional and regulatory capability, with closed-end funds and ETFs being a particular area of focus. The group acts as fund counsel to all US-registered investment companies sponsored and advised by John Hancock Investment Management Services and its affiliates, with aggregate assets under management of more than $110bn. The work for this client encompasses preparation and review of routine regulatory filings, board materials and fund reorganizations as well as litigation, reflecting the full scope of the team’s capabilities. It also serves as counsel to Federated Investors, a mutual fund sponsor with over $400bn in assets under management, for which it acted on the acquisition of the assets and clients of Putnam Prime Fund, an institutional money-market fund. Other clients include AXA Equitable Life Insurance Company, Lone Star Funds and Prudential Mutual Funds. Boston-based Michael Caccese leads the practice, while Mark Goshko is considered a leading light in the mutual funds industry. Thomas Hickey and Mark Amarosi are also recommended.

Morgan Lewis’ team is ‘practical, cost-effective, and has extensive investment management industry expertise’, with particular mention made of its ‘incomparable ETF experience’, where it represents 48 of the top 50 open-end ETFs ranked by total assets. 45 attorneys focus on the registered funds industry, and clients remark that the group’s ‘long-term view of the business’ is one of its key attractions. These clients include nine of the ten largest money managers, and major industry associations such as the Investment Company Institute and the Bank Insurance & Securities Association. The practice, which brought 41 new funds to market in the first nine months of 2010, is considered ‘forward-thinking and experienced, providing preventative advice and counsel where necessary’. On the ETF front, the group advised on the initial launch of the US One Fund, an actively managed ETF of ETFs, and completed the launch of Schwab’s new family of ETFs. Other ETF-sponsor clients include State Street Global Advisers, Rydex and Wisdom Tree. 2010 also saw the team appointed as counsel to the BBH Trust, which involved registering a new retail fund class of BBH Core Select, which marked the client’s first entry into retail sales of its funds. In an indication of the group’s regulatory expertise, it obtained no-action relief from the SEC for American Capital, permitting this longstanding client to adopt a shareholder distribution policy that would otherwise have been prohibited under the Investment Company Act. Clients are quick to highlight the ‘level of experience and depth of the team’ as a whole, with W John McGuire’s ‘very deep knowledge of ETFs’ and ‘experience, leadership and support’ considered an invaluable resource by clients. Washington DC-based Thomas Harman, whose former role as chief counsel to the SEC ‘provides him with a great resource of knowledge and insight on regulatory issues’, also draws praise, as does New York-based team head Steven Stone. Christopher Menconi in Washington DC was promoted to partner.

Ropes & Gray LLP has ‘an excellent investment management practice with a great deal of depth in the mutual funds space’. Investment management is the core focus of 150 lawyers nationally, with a team of 25 partners providing corporate and securities advice to a client base that includes independent trustees to funds belonging to Schwab and Dodge & Cox, and to registered funds from Allianz Funds, Natixis and Loomis Sayles Funds. The team’s expertise spans the breadth of registered funds matters, from corporate advice and restructuring to regulatory compliance and litigation. It achieved a significant victory for Harris Associates, manager of the Oakmark family of mutual funds, in a US Supreme Court Case regarding the standard for determining how “excessive fee” claims against mutual fund advisers will be litigated. The court upheld the current standard and rebuffed attempts by plaintiffs’ lawyers to encourage increased judicial scrutiny of fees. Recent transactional highlights include advising Columbia Funds on Ameriprise Financial’s $1bn acquisition of the long-term asset management business of Columbia Management. Following the transaction’s completion, the team has continued to represent both the target and the acquirer’s funds on more than 90 fund reorganizations. It also advised Natixis Global Asset Management, Loomis Sayles & Company, and AlphaSimplex Group on the design, launch and operation of two open-end mutual funds that use complex derivative strategies to pursue their investment objectives. It has also been involved in the highly popular ETF market, representing the independent trustees of Market Vectors ETF Trust, considered to be one of the more innovative ETF providers, on the organization of its $13bn complex of over 30 funds. ‘Thorough analysis and excellent business acumen’ are two of the practice’s characteristics highlighted by clients. Boston-based investment management head John Loder has a ‘sharp, commercial eye’. In the same office, Gregory Sheehan and Susan Johnston are also recommended, as is New York office head Bryan Chegwidden.

Willkie Farr & Gallagher LLP’s investment management team is a subset of its wider asset management group and is noted for its ‘strong domestic offering’ for mutual funds work, with a particular emphasis on regulatory compliance and 1940 Act advice. It is highly active on the transactional side, with its representation of Brookfield Asset Management on its $1.7bn acquisition of an additional interest in General Growth Properties demonstrating its capabilities on major fund-related acquisitions. It also advised Morgan Stanley Investment Management in connection with a nine-investor acquisition of $350m of shares in Better Place, a start-up company that is the world’s leading electric vehicle service provider. Asset management group head Barry Barbash advised on that deal, and is considered a market leader in the registered funds space; he is a former director of the SEC’s Division of Investment Management. The group also serves as fund counsel to Reserve Primary Fund and recently advised Ares Capital on its $648m acquisition of Allied Capital.

Bingham McCutchen LLP’s 40-lawyer investment funds practice ‘exhibits strong knowledge of the federal securities laws and how mutual funds and their securities should view those laws, rules and regulations’, making it a key outfit in the registered funds space. The practice covers commingled investment funds of almost every stripe, including registered mutual funds, closed-end investment companies, ETFs and variable insurance products. In line with its broad capability and reputation for being ‘one of the best in the industry’, the practice advises some of the largest investment management and financial services organizations, including American Funds, Fidelity Investments and Fidelity International, Goldman Sachs Asset Management, Legg Mason Funds, Pioneer Investments and Transamerica Funds. Representative highlights include acting as fund counsel to Legg Mason Partners Funds’ 54 money-market mutual funds with assets of over $96bn in assets under management. It also advised Pacific Capital Funds on reorganizing five Bank of Hawaii proprietary mutual funds into two other unaffiliated fund groups, and the subsequent liquidation of the remaining seven funds. Although new fund formations were relatively few in 2010, the team still advised Capital Private Client Services Funds on creating a new fund group and Investment Managers Series Trust on the creation of 18 new fund series sponsored by UMB. Practice group leader Roger Joseph is ‘thorough and presents his views in a very constructive way’, and is ‘one of the leaders in the legal community’. Lea Anne Copenhefer is ‘very knowledgeable and measured as to how she approaches conflicted issues’, while collectively the team ‘addresses issues head on but does it in a way that the client does not believe they are trying to run their business’.

‘A pleasure to work with’, Drinker Biddle & Reath LLP ‘measures up well with any of the other large law firms in the US that have a mutual fund regulatory practice’. Nine partners provide investment management advice to more than 25 mutual fund families and a broad pool of investment and commodity trading advisers, broker-dealers and insurers. It is a core practice area for the firm, with clients noting that ‘the value proposition is outstanding. It understands the law, it establishes strong personal relationships and its pricing is reasonable’. The group’s ability to work across several sectors and funds markets has placed it in a strong position to take advantage of the growing use of closed-end funds investing in hedge funds and alternative products. For example, it advised on negotiation and implementation of the restructuring of Hatteras Alternative Mutual Fund complex. 2010 saw it pick up new client representations, with FEG Absolute Access Fund appointing the team to advise on its registered fund-of-funds platform. The practice also acted for new client nTrust ETFs on forming a new ETF and represented Northern Funds on negotiations with the SEC to obtain first-of-its-kind relief from the Investment Company Act to permit directors to invest in sub-advisers of multi-manager mutual funds. In Philadelphia, practice head Michael Malloy is highly rated and ‘focuses on the long term’. He and Joshua Deringer ‘have established an excellent level of professional chemistry between themselves and among us’. Both have ‘the ability to explain complex matters in readily understandable terms, and are completely familiar with the legal subject matter applicable to the mutual fund industry’. In addition, Diana McCarthy is ‘an excellent ’40 Act/securities attorney, and is a pleasure to work with. She is very knowledgeable in the field and is usually able to explain concepts in layman’s terms’. Washington DC-based Mark Costley is a broker-dealer expert.

Providing a ‘good overall level of service, with solid knowledge and business acumen’, Goodwin Procter LLP’s five-partner investment management team acts for a number of leading institutional funds and as counsel to independent directors. The team’s ‘level of understanding and expertise on broker-dealer, mutual fund and general securities matters is first-rate’, and its broad spectrum of work for registered funds gives the team a strong perspective on corporate governance issues, an increasingly valuable asset in the light of greater regulatory scrutiny. It serves as fund counsel to the independent directors of ING’s complex of funds, and during 2010 advised on forming new funds, merging and liquidating existing funds and updating registration statements to address new disclosure requirements. It also acted as special litigation and regulatory counsel to the independent trustees of the Reserve Funds, providing assistance on a broad range of litigation and regulatory issues arising from the failure of the Primary Reserve Fund, a money-market fund, to maintain a constant dollar value. The team also acts as fund counsel to the independent trustees of the Eaton Vance complex of funds and the Van Eck family of funds; duties recently included advising the former on its investigation and response to several shareholder demands and on derivative and class action lawsuits filed by shareholders. In addition to the practice’s substantial suite of registered funds clients, the team also advises a broader range of service providers in the mutual funds industry, including securities lending agents such as the Bank of New York Mellon and State Street Global Advisers. Boston-based Philip Newman heads the practice and is ably supported from Washington DC by the ‘particularly knowledgeable and helpful’ Marco Adelfio and Christopher Palmer, who is ‘very accessible, and an absolute pleasure to work with’.

Kramer Levin Naftalis & Frankel LLP’s high-end investment management practice ‘has deep knowledge of the mutual funds industry and provides its services comprehensively and promptly’. Based in New York, the team draws sophisticated representations from market-leading fund complexes and independent directors, including four of the 20 largest fund complexes in the industry. Its client base includes independent directors of JPMorgan, Invesco, Morgan Stanley, OppenheimerFunds, First Eagle and ProFunds/ProShares’ fund complexes; it also advises a number of these same clients on money-market fund issues. Highlights for 2010 included advising the independent trustees of Invesco Funds with respect to Invesco’s acquisition of controlling interests in some of the Morgan Stanley and Van Kampen funds, which aggregated approximately $120bn of assets. The team also represented the independent trustees of Morgan Stanley Funds on restructuring its retail funds and their subsequent transfer to Invesco. ‘All the attorneys provide great depth of knowledge and exhibit good judgment’, with co-chair Carl Frischling singled out for his ‘grounded ability to understand business-based analysis and apply it to the legal and regulatory framework without being blinkered by the statute-driven nature of the business’. Susan Penry Williams is also highlighted as giving ‘unfailing good service; she has very good industry knowledge and gives good advice’. Jay Baris recently left the practice to join Morrison & Foerster LLP.

Paul, Hastings, Janofsky & Walker LLP is ‘excellent for ’40 Act matters; better than many other firms in the mutual funds sector’. Its practice runs the gamut of investment management advice, acting as counsel to open-end and closed-end funds, fund advisers, independent directors, administrators and underwriters. Its expertise extends to fund mergers and reorganizations, as well as SEC inspection issues, and the group works closely with broker-dealers who sponsor and underwrite unit investment trusts. Consolidation was a continuing theme for 2010, with highlights including acting as counsel to Morgan Stanley’s unit investment trust on regulatory issues arising from the sale of its asset management business to Invesco. Following the sale, the practice was subsequently retained by Invesco to advise on a new strategy from a compliance and regulatory perspective. It also advised Brookfield Investment Management on multiple litigation matters related to its takeover of Morgan Keegan Asset Management’s open and closed-end funds, which were concentrated in the mortgage-backed securities sector and suffered significant losses as a result. The team’s work included advising the funds on the ramifications of the prior auditor’s withdrawal of its audited financial reports and opinions for the last four years based upon facts uncovered during a related SEC investigation. On the fund formation front, the practice acted for Reich & Tang Asset Management on the creation and registration of an institutional money-market fund to complement its existing retail money-market fund complex. Domenick Pugliese ‘delivers excellent service’, while investment management head Michael Rosella is also ‘very good’.

Sidley Austin LLP has ‘a premier capital markets and broker-dealer advisory practice’, quality which infuses the investment management practice, which has five partners specializing in registered and mutual funds. The mutual fund expertise exhibited by this ‘small but high-class’ team is highly valued, and it acts as counsel to BlackRock Advisers on its fund formation matters, including 11 new mutual funds since 2009. It also advised Mirae Asset Global Investments on the expansion of its US investment management business through the organization, registration and launch of Mirae Asset Financial Group. Commodities and ETFs were two key trends in 2010, and the team capitalized on that by filing registration statement for new commodity futures-based ETFs: two for Jefferies Commodity Investment Services, five for Factor Capital Management and one on behalf of BNP Paribas. The team pioneered this niche area with its work on the launch of the first commodity futures-based ETF for Deutsche Bank. In addition to its mutual fund client base, the team also has a core strength advising underwriters such as UBS, Bank Of America Merrill Lynch, Citigroup, Morgan Stanley and Wells Fargo on equity offerings of registered funds, including most recently the $500m IPO by Kayne Anderson Midstream/Energy Fund. John Mackinnon and Frank Bruno are both highly recommended.

Simpson Thacher & Bartlett LLP ‘provides outstanding service for ’40 Act matters’, and ‘thoughtful, constructive and forward-thinking legal and structuring advice’. Clients cite the firm’s ‘longer history and broader global footprints’ as key factors in its gaining a competitive advantage over many other practices. The team handles both sponsor and underwriter representations on public offerings, M&A and regulatory compliance matters. Although there is some concern that reliance on one specialist partner inhibits the practice’s scope, the group works closely with private funds, tax and general capital markets and M&A colleagues, and offers ‘depth within the franchise that enables it to commit a full complement of resources to each transaction’. Highlights for 2010 included advising ClearBridge Energy MLP Fund in connection with its $1.27bn IPO, which was the largest offering of a closed-end fund in the previous three years to June 2010. It also advised Ameriprise on its $1bn purchase of the long-term asset management business of Columbia Management from Bank of America. It has also been advising underwriters on business development company offerings, including Apollo Investment Corporation’s $186m offering of common shares in May 2010. Other clients include the independent trustees of Allianz Funds, Blackstone Asia Advisors, Citigroup Global Markets, Legg Mason Closed-End Funds, and Wells Fargo Securities. Practice head Sarah Cogan is ‘a valuable partner because of her firm grasp of the commercial issues and of the evolving framework of rules and regulations’. Also recommended are the ‘responsive, even-handed’ Andrew Keller and Joseph Kaufman, who gives ‘thoughtful oversight and value-added commentary’.

Stradley, Ronon, Stevens & Young fields 43 attorneys in Philadelphia and Washington DC, all focusing in on mutual funds, money-market funds and ETFs. It has a long history in the sector, dating back to the establishment of one of the first mutual funds in the US, and now advises more than 700 separate funds, with combined assets under management nearing the trillion-dollar mark. In 2010, the team represented a fund complex on a major restructuring of its mutual fund lineup, which required the reorganization of over 70 open-end funds and one closed-end interval fund, as well as the liquidation of several open-end funds. It also has significant offshore structuring expertise, and recently launched several first-to-market developing country exchange-traded funds, including ETFs investing in India through a Mauritius subsidiary. With the regulatory landscape shifting significantly in 2010, the team has worked extensively with a number of money-market fund sponsors to develop policies, procedures and board reports for their portfolios to address these evolving regulatory requirements. These included stress tests and procedures to identify shareholders whose redemption needs might adversely impact the fund. It also assisted industry groups in interpreting the regulatory amendments and sought interpretations from the SEC. Bruce Leto heads the investment management group and delivers ‘solid, reliable advice’.

Davis Polk & Wardwell LLP’s investment management practice spans hedge and private equity funds, and also has a significant and growing profile in the registered funds space. The group provides ongoing advice to seven registered fund complexes with aggregate assets of over $125bn, and has developed a particular strength in the ETF sector with 2010 seeing it become counsel to the SPDR S&P 500 ETF Trust, the world’s largest ETF. It also provides ETF advice to major investment banks such as Deutsche Bank, UBS, Credit Suisse and Société Générale, and provides regulatory advice to the NYSE on all listed ETFs. The firm’s ability to work across fund types has meant it is increasingly in demand due to the ever-growing hybridization of funds. In 2010, it advised two large hedge fund managers on forays into the registered funds space: it represented Avenue Capital Group on launching a registered funds business and FrontPoint Partners on forming a registered fund of FrontPoint hedge funds sponsored by Central Park Group. It also provides 1940 Act counsel to The Japan Fund, the world’s first and oldest Japanese equity fund. Nora Jordan and Gregory Rowland both provide transactional, restructuring and asset management advice.

Shearman & Sterling LLP’s asset management practice fields three US-based partners and six associates specializing in registered funds, who are supported by 30 partners worldwide. Although modest in size, this dedicated team has a broad range of expertise and experience representing clients ranging from blue-chip independent fund families to some of the largest financial services companies worldwide. It has a sophisticated regulatory capability, with the team acting on a groundbreaking SEC no-action letter for Fortis Investment Management that allowed Fortis to continue to serve as investment adviser to its US mutual fund clients, notwithstanding the nationalization of Fortis. More recently, the team has been negotiating on behalf of a derivatives clearing house to expand access to its registered funds users. Transactional highlights from 2010 included representing First Eagle Funds on organizing a special purpose subsidiary to engage in gold bullion investing, and advising CAI Multi-Adviser Hedge Funds Portfolios, one of the largest registered fund-of-hedge funds on its transition to Skybridge Capital after its purchase of the Citigroup business line. It also provides advice to the independent trustees of JPMorgan Alternative Asset Management, Rochdale Funds and Victory Funds. New York-based Nathan Greene and Paul Schreiber co-chair the practice, with newly promoted partner Russell Sacks providing regulatory and formation advice to broker-dealers.

Skadden, Arps, Slate, Meagher & Flom LLP’s ‘small, but enthusiastic’ practice advises fund complexes and underwriters in connection with the creation, structuring, offering, operation and regulation of registered investment companies and business development companies. In line with the firm’s preeminent reputation for M&A, investment management partner Richard Prins acted for Prospect Capital Corporation on its acquisition of Patriot Capital Funding and subsequent public offerings. The team also acted for BlackRock in the sale to third-party investors of $2.8bn of common and preferred stock, as well as advising THL Inc, a business development company on its $200m IPO. Other clients include AG Edwards closed-end funds, Guggenheim closed-end funds, UBS, Third Avenue Funds and Apollo Investment Corporation.

Stroock & Stroock & Lavan LLP represents more than 700 mutual funds, closed-end funds and ETFs with more than $1 trillion in assets under management, belying the firm’s reputation as a ‘chop shop’ for registered funds. Indeed it is one of the most active registered funds practices in the industry, with experience as counsel to investment companies and independent board members such as Apollo, Bank of America, Barclays, Baron, BNY Mellon and Cohen & Steers, as well as the registered funds they advise. Regulatory compliance has been a key driver of the practice’s workflow, acting for the independent board members of Carlyle Capital Corporation, Western Asset Premier Bond Fund and the Van Kampen family of funds. New York-based Stuart Coleman chairs the investment management group.

Vedder Price’s Chicago-centered fund formation team comprises ten shareholders, two counsel and eight associates, and is headed by ‘bona fide ’40 Act specialist’ David Sturms. Combined with Cathy O’Kelly’s regulatory expertise, the pair attracts a prominent array of registered funds and institutional advisers: these include Activa mutual funds, Legg Mason funds, Nuveen open and closed-end funds, Oak Associates funds, Utopia funds, INVESCO Institutional, UBS Alternative Product Group and Northern Trust Investments. It also handles broker-dealer representations for Harris Investor Services, Oberweis Securities, Wayne Hummer Investments, and Arbor Research and Trading.

WilmerHale’s presence in the registered funds arena concentrates primarily on the contentious side and regulatory counseling, although it has broader registered fund formation expertise. The team is spread between Washington DC, where practice head James Anderson is based, and New York, and advises registered investment companies and their directors, investment advisers and broker-dealers. 2010 saw the team advise State Street Bank and Trust Company and Global Street Advisers on a case brought by the SEC alleging improprieties in the management of various bank funds resulting in the loss of hundreds of millions of dollars in sub-prime mortgage investments. The case was ultimately settled for what was the second largest settlement by dollar volume of any matter brought by the SEC in 2010. It also provides regular advice to Lazard Asset Management on securities regulatory matters pertaining to its asset management business.