This is the third article in our three-part series on how recent changes to the New York City and California lobbying laws will impact the compensation and activities of third-party and in-house hedge fund marketers. The first article in this series described the relevant legal changes in depth and included a chart comparing analogous provisions of the New York City and California laws. See “Recent Developments in New York City and California Lobbying Laws May Impact the Activities and Compensation of In-House and Third-Party Hedge Fund Marketers (Part One of Three)
,” Hedge Fund Law Report, Vol. 4, No. 6 (Feb. 18, 2011). The second article in the series analyzed the implications of the lobbying law changes for third-party hedge fund marketers. Notably, the second article examined how hedge fund managers may structure new agreements with third-party marketers, or restructure existing agreements, in light of the ban on “contingent compensation” under the New York City and California laws. That second article also discussed representations, warranties and covenants called for by the revised laws; due diligence consequences of the revised laws; and – most provocatively – why the lobbying law changes may be moot in light of a broader macro trend impacting third-party marketers. See “How Can Hedge Fund Managers Structure the Compensation of Third-Party Marketers in Light of the Ban On ‘Contingent Compensation’ Under New York City and California Lobbying Laws? (Part Two of Three)
,” Hedge Fund Law Report, Vol. 4, No. 13 (Apr. 21, 2011). This article is the third in our lobbying series, and focuses on the implications of the lobbying law changes for in-house hedge fund marketers. In particular, this article details: the typical compensation structures of in-house hedge fund marketers; how much in-house hedge fund marketers are paid, including specific numbers based on conversations with executive search professionals with relevant experience; whether in-house marketers fall within the scope of the California and New York City lobbying laws; specific strategies for structuring or restructuring the compensation of in-house marketers based on the lobbying law developments; exemptions from the “lobbyist” designation that may be available to in-house marketers; a discussion of relevant guidance provided by the California Fair Political Practices Commission in a recent letter; and the related issue of registration of an in-house hedge fund marketing department as a broker, and of the members of such a department as associated persons of a broker.