Managing a private fund requires a lot of time and money. It also opens the manager up to the scrutiny of the SEC and investors, both of which can be quite demanding. Even if the fund’s strategy is profitable, the intense pressure and competition may be enough to drive a manager from the business – and possibly into the creation of a family office instead. The Hedge Fund Law Report recently spoke to Daniel Bresler, partner at Seward & Kissel, about the issues to consider when converting a private fund manager into a family office. This article presents the discussion on family offices in the current environment; the pros and cons of converting a private fund manager into a family office; other factors to consider; the conversion process; and the role of regulators in that process. It also includes two checklists based on the firm’s white paper on this topic: one checklist on the winding-down process and another on the process of setting up the family office. Managers can download and use these checklists to guide the conversion process. For additional commentary from Bresler, see our two-part series on SEC examination and enforcement priorities: “Cybersecurity, Business Continuity and Conflicts of Interest
” (Jul. 22. 2021); and “ESG, New Marketing Rule and Other Potential Focuses
” (Jul. 29, 2021).