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Ernst & Young LLP Wealth & Asset ManagementFILE/1708... · Tiffany Norris-Pilcher Partner, Emerging...
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Ernst & Young LLP Wealth & Asset Management Seed Capital Services: Seed investing, acceleration capital and strategic minority interests Seed capital deals continue to be a growing trend among asset managers, institutional investors, family offices and others. The Seed Capital Services team provides clients with the benefit of our extensive hands-on experience and technical knowledge in tax structuring and compliance, financial statement audits, asset valuation, seed deal structuring and regulatory compliance.
Transcript of Ernst & Young LLP Wealth & Asset ManagementFILE/1708... · Tiffany Norris-Pilcher Partner, Emerging...
Ernst & Young LLPWealth & Asset Management
Seed Capital Services: Seed investing, acceleration capital and strategic minority interests Seed capital deals continue to be a growing trend among asset managers, institutional investors, family offices and others. The Seed Capital Services team provides clients with the benefit of our extensive hands-on experience
and technical knowledge in tax structuring and compliance, financial statement audits, asset valuation, seed deal structuring and regulatory compliance.
2 | Ernst & Young LLP’s capabilities: serving seeders and seeds
• The credit crunch of 2008 and 2009 and the ensuing financial crisis have led to an enhanced regulatory environment with difficult hurdles for new asset managers to raise capital.
• As investment professionals look to launch alternative investment management firms in this challenging atmosphere, they have found a rift between supply and demand for start-up capital, which has led to a rise in seeding activity.
• The financial crisis has prompted many larger, more prolific asset managers to negotiate favorable terms with start-up asset managers, whereby these investors (Seeders) provide the emerging managers (Seeds) with initial capital infusions in exchange for a series of exclusive rights, ranging from reduced fees to profit sharing in management and incentive fees.
• This mutually beneficial relationship presents an opportunity for the Seed to obtain initial and continual capital infusions from the Seeder, as well as other investors, by way of capital introduction by the Seeder. This allows the Seed access to funding for start-up expenses and to build its operations.
• Similarly, the seed arrangement provides the Seeder with a stream of ongoing compensation from the fee revenues at the underlying start-up.
• Capital raising for established funds has been equally challenging and led to acceleration capital deals with strategic investors.
• Surveys and alerts: We distribute global and regional alerts and newsletters to clients on a regular basis, keeping them up-to-date on critical stories and technical topics. Recent surveys include the EY Global Hedge Fund and Investor Survey and Global Private Equity Survey.
• Roundtables: Small groups of C-suite executives attend our private roundtable discussions to share views on common interests. Recent roundtables include the Hedge Fund Strategic Operations Roundtable, Hedge Fund Financial Executives Roundtable, Hedge Fund of Funds CFO Roundtable, Alternative Funds Roundtable and Private Equity CFO Roundtable.
• Client webcasts: Our interactive webcasts on timely technical and industry topics are offered to clients several times each year, providing clients opportunities to ask questions directly to the presenters. Recent webcast titles include “Launching a successful hedge fund” and “Update for alternative investment companies” in addition to our Wealth & Asset Management Tax Updates.
• Speaking engagements: We participate in industry conferences where subject-matter experts share their insights.
• Viewpoints: We regularly present articles and viewpoints on key industry topics and develop thought leadership for seeder funds and seeded fund managers. Recent articles include “EY Seed Capital Services: investment structures and US tax considerations” and “EY Seed Capital Services: valuation considerations for seeders.”
Thought leadership and events
Ernst & Young LLP works proactively to help our clients through the challenges and issues affecting the seed investment, acceleration capital or strategic minority interest space. In addition, we sponsor many platforms throughout the year to keep our clients informed, including roundtable discussions with senior fund executives, fund surveys, papers and alerts on hot topics affecting the sector, published articles, interactive webcasts and participation in many industry conferences.
What is driving the growth of seed capital arrangements?
Sources: Hedge Fund Intelligence, Top 50 P&I Global Money Managers, Private Equity International’s PEI 300
3Ernst & Young LLP’s capabilities: serving seeders and seeds |
Within the seeding business, Ernst & Young LLP commands the breadth of experience, deep technical skills and an in-depth understanding of business trends and how the industry is rapidly evolving.
By teaming with the largest global wealth and asset management firms to the smallest start-up boutiques, we help our clients navigate the intricacies of seeding arrangements with our comprehensive technical knowledge and industry experience.
Against a backdrop of financial and regulatory transformation, wealth and asset management firms are finding adaptability in capital arrangements critical for success. Ernst & Young LLP’s Seed Capital Services brings together a dedicated team of professionals with deep technical experience in assurance, tax, and transaction and advisory services related to seeding, acceleration capital and strategic minority interest transactions to help our clients make timely, well-informed decisions.
We work to anticipate market trends for Seeds and Seeders, identify the implications of those trends and develop points of view on relevant industry issues.
Clients can find out more about EY’s Wealth & Asset Management network at www.ey.com/wealthassetmgmt.
The EY difference• Internal network holds regular meetings to discuss accounting,
reporting, tax and operating matters as well as emerging issues
• Thought leadership in the seeding space addresses Seed/Seeder hot topics (i.e., tax and valuation considerations)
• EY member firms provide services to approximately 70% of the top 100 global hedge funds
• EY member firms audit approximately 40% and provide tax services to approximately 60% of the top 100 global hedge funds
• EY member firms audit approximately 40% and provide tax services to approximately 70% of the top 50 Americas hedge funds
• EY member firms audit 40% and provide tax services to 60% of the top 25 global fund of hedge funds
Leading service provider for asset management firms and start-upsWe have been the dominant accounting firm for alternative investment managers for more than 30 years in assurance, tax and advisory.
Seed Capital
Services
Why EY?
EY | Assurance | Tax | Transactions | Advisory
About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.
EY is a leader in serving the global financial services marketplaceNearly 51,000 EY financial services professionals around the world provide integrated assurance, tax, transaction and advisory services to our asset management, banking, capital markets and insurance clients. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Organization today includes more than 11,000 professionals at member firms in over 50 locations throughout the US, the Caribbean and Latin America.
EY professionals in our financial services practices worldwide align with key global industry groups, including EY’s Global Wealth & Asset Management Center, Global Banking & Capital Markets Center, Global Insurance Center and Global Private Equity Center, which act as hubs for sharing industry-focused knowledge on current and emerging trends and regulations in order to help our clients address key issues. Our practitioners span many disciplines and provide a well-rounded understanding of business issues and challenges, as well as integrated services to our clients.
With a global presence and industry-focused advice, EY’s financial services professionals provide high-quality assurance, tax, transaction and advisory services, including operations, process improvement, risk and technology, to financial services companies worldwide.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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Ernst & Young LLP contacts
Seda LivianTax Partner Co-leader, Seed Capital Services teamWealth & Asset ManagementNew York, NY+1 212 773 1168 [email protected]
Rich Ohanian Assurance Senior ManagerWealth & Asset Management New York, NY+1 212 773 [email protected]
Vincent Baldari PartnerTransaction Advisory Services Due Diligence New York, NY+1 212 773 [email protected]
Jesse ShapiroAssurance Partner Co-leader, Seed Capital Services team Wealth & Asset ManagementNew York, NY+1 212 773 8562 [email protected]
Chintan MuchhalaAssurance Partner Wealth & Asset ManagementNew York, NY +1 212 773 8280 [email protected]
Stephan ThollotPrincipalTransaction Advisory Services Valuation & Business ModelingNew York, NY+1 212 773 [email protected]
Tiffany Norris-Pilcher Partner, Emerging Managers Platform Leader Bahamas +1 242 502 6044 [email protected]
Amber Williams Tax Senior ManagerWealth & Asset Management New York, NY +1 212 773 [email protected]
Omar Mahmoud Senior Manager Transaction Advisory ServicesValuation & Business Modeling New York, NY +1 212 773 5930 [email protected]
Irina Pisareva Tax Principal International Tax Services Wealth & Asset Management New York, NY+1 212 773 [email protected]
Seed Capital Services team
Natalie Deak JarosPartner, Co-leader of Americas Hedge Fund MarketsNew York, NY+1 212 773 [email protected]
Dave RacichPartner, Co-Leader of Americas Hedge Fund MarketsNew York, NY+1 212 773 [email protected]
Michael SerotaPartner, Global Hedge Fund LeaderNew York, NY+1 212 773 [email protected]
Wealth & Asset Management leadership
