When East Meets West: Ten Considerations for VC Managers Launching “Evergreen” Funds and Hedge Fund Managers Launching PE Funds

The Fourth Industrial Revolution – i.e., innovation in areas such as artificial intelligence, machine learning, quantum computing, robotics, the Internet of Things, genetic engineering and other technologies – has affected, and will continue to impact, people’s lives in ways that were once unimaginable. As that revolution reshapes the U.S. economy, the continent that once seemed to separate the “West Coast” world of venture capital (VC) and growth equity investing and the “East Coast” world of hedge fund investing has shrunk, resulting in the current landscape where managers from each coast are deviating from their traditional fund products to launch either counterpart products or those with hybrid characteristics. As that practice becomes more pervasive, it is valuable for fund managers to consider how the innate differences in the products necessitate certain practical modifications to managers’ operations, compliance practices, fund structuring and other efforts. In a guest article, Paul Weiss partners Udi Grofman and Lindsey L. Wiersma identify the prevailing trend within the private funds industry in which the East and West Coast worlds are melding. In light of that development, the article then delineates ten unique areas that require extra considerations by managers that are deviating from their traditional approaches to offer new types of fund products. See “Structural and Operational Considerations for Hybrid Funds” (Jan. 14, 2021); and “Hedge Fund Managers Turn to Hybrid Fund Structures to Reconcile Fund Liquidity Terms and the Duration of Assets” (Feb. 4, 2009).

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