Proskauer has expanded its hedge fund practice in New York with the hiring of a pair of highly experienced transactional and regulatory lawyers.

Robert Leonard and Michael Mavrides come to Proskauer as partners from Bingham McCutchen. Leonard has advised hedge funds in the U.S. and abroad on everything from structuring and organization to regulatory compliance for well over two decades. His specialized knowledge extends to master-feeder, mini-feeder, side-by-side, funds of funds, and funds of one. He has provided counsel to clients undertaking SEC and CFTC registration or needing expert guidance on SEC examinations. Mavrides represents hedge funds, funds of funds, private equity funds, and real estate funds on formation, structuring, joint ventures, structured products, seed capital, anchor capital, and other matters.

In an exclusive interview with IFLR1000, Leonard explained why he considers Proskauer a good fit for his highly specialized hedge fund practice.

“Proskauer has a tremendous platform for servicing hedge funds of today and the future. They’re committed to continuing to build out that platform as new areas arise,” he said. “They have the domestic and international capabilities for hedge funds. They have tax, ERISA, and cross-border expertise here in spades. The private equity group here has laid a lot of the groundwork. Private equity funds are different, but they still come across a lot of the issues we work on with hedge funds.”

According to Leonard, the regulatory compliance side of hedge funds continues to be an area where clients are devoting substantial resources, and this is also true of private equity funds now that they are more regulated. Regulatory work for such clients goes hand in hand with credit and investment counsel.

“I think that the end of 2013 brought kind of a normalization to dealing with everything that came out of Dodd-Frank, but also required hedge fund managers to bulk up on the compliance side. We still see a lot of work there. We also see a lot of work on the transactional side. We could have clients on the credit side who are looking at various credits, or distressed or private equity-like investments. It’s been a very busy five to six months for our whole practice in the hedge fund industry,” he said.

In coming months, Leonard expects the regulatory side of his practice to stay quite busy as U.S. managers face compliance with Accountability and Financial Management Division regulations, whether or not they have a U.K. office. U.S. managers seeking to sell into the E.U. also face regulatory burdens. Another phenomenon is the considerable number of SEC exams of managers who had previously not been subject to such scrutiny.

“The SEC had come out two years ago with the concept of a presence exam. They want to come in anywhere from a day to a couple of days just to get to know the manager," Leonard noted. "It’s more popular having that than having regulators spend two to three weeks in your conference room and try to examine everything."

In Leonard’s view, the SEC has made progress toward becoming educated about the hedge fund industry. Part of this may be attributable to the fact that the agency’s head of investment management, Norm Champ, has a background at the Chilton Investment Company, a shop with a hedge fund and one or more registered fund products.

“Hybrid funds have always been around, but there has been much more of a focus on them after the financial crisis, really starting toward the end of 2009. People are trying different structures. The most important thing is to try to tie the liquidity of your investment to the liquidity you offer your investors,” Leonard said.