Charltons provides high impact advice to Hong Kong fund managers on all areas of their operations and through the full life cycle of their businesses, from establishment of operations and regulatory licensing, compliance matters, SFC licensing, to fund formation and promotion, and management, trading and investment of fund assets. We also have particular experience in advising on listing Chapter 21 funds on the Hong Kong Stock Exchange.

Our fund management clients range from global fund managers, to smaller start-up managers. The fund managers represented by us manage funds across the full spectrum of asset classes, including listed stocks, fixed income and derivative securities, property, infrastructure, natural resources, emerging market private equity and venture capital, hedge funds and distressed debt.

We help Hong Kong fund managers set up and structure their own businesses in Hong Kong and assist in the preparation of shareholder and employment agreements. We advise on the types of regulated activities that require licensing by the Securities and Futures Commission (SFC) under the Hong Kong Securities and Futures Ordinance (SFO) and related exemptions. We also assist Hong Kong fund managers in applying for SFC licences and complying with ongoing obligations as licensed corporations.

We help both international and Hong Kong fund managers to structure and launch investment funds. We will advise on the applicable regulatory framework and suggest structures, selling restrictions and other solutions that will enable funds and fund managers to avoid SFO authorisation and prospectus registration if appropriate. We will negotiate fund terms with anchor investors, prepare information memoranda and subscription agreements, draft and negotiate custodian, administration, prime broker and other third party service agreements, and prepare corporate resolutions and other launch documents. We will also draft the investment management agreement between the fund manager and the fund. Where an offshore structure is used, we will engage and instruct offshore counsel and coordinate multi-jurisdictional legal advice to offer a single point of contact and integrated legal solutions to the client.

We understand the complexities and challenges of cross border investment product offerings. Charltons works with a network of law firms worldwide, which allows us to coordinate with experienced lawyers to deliver timely and cost-effective solutions, particularly regarding fund selling restrictions and tax issues in overseas jurisdictions.

After fund launch we offer Hong Kong fund managers a full range of services covering all aspects of fund operations, including amendments to fund documentation (for example, a change in investment strategy) and additional investor subscriptions. Our downstream practice also includes transactional work as funds commence investment activities (such as M&A involving portfolio companies and financing rounds for portfolio companies), advice on redemptions and transfers of fund interests, fund restructuring, exits (including sales and initial public offerings of portfolio companies), advice on loan facilities (including revolving credit facilities and margin financing) and regulatory matters. We can also guide fund managers through the disclosure of interests regime under the SFO and related SFC and Hong Kong Stock Exchange filings.

In addition to helping to establish mainstream fund structures, we also have significant knowledge and experience in advising clients on the creation of bespoke products, and drafting and negotiating managed account agreements for separately managed accounts with particular investors.

In cooperation with Boase Cohen & Collins, Charltons can assist fund management clients in relation to SFC investigations, enforcement and disciplinary matters. Our experience includes advising SFC licensed corporations on misconduct by employees and advising financial intermediaries on potential unauthorised selling of investment products and carrying on “regulated activities” without proper licensing. We have particular experience in advising on listing Chapter 21 funds on the Hong Kong Stock Exchange. We can assist with all aspects of SFC licences for Hong Kong fund managers.