Exempt Non-U.S. Advisers - The Foreign Private Adviser Exemption
If a non-U.S adviser qualifies as a “foreign private adviser,” it will be exempt from registration under the Advisers Act, and enables the adviser to therefore charge a management fee for a US SPV.
The Foreign Private Adviser Exemption is a narrow exemption; it is only available to a non-U.S. adviser which:
(i) has no place of business in the U.S.,
(ii) has, in total, fewer than 15 “clients” in the US and “investors” in the US in private funds (including SPVs) advised by the investment adviser,
(iii) does not exceed $25 million of in AUM attributable to such U.S. clients and investors,
(iv) does not hold itself out generally to the public in the U.S. as an investment adviser.
A non-U.S. adviser relying on the Foreign Private Adviser Exemption must not only count each U.S. “client,” but also each U.S. “investor” in any “private fund” advised by the non-U.S. adviser.
U.S. Client - Corporations, general partnerships, limited partnerships, limited liability companies, trusts, or other legal organizations to which the adviser provides advice based on the organization’s legal objectives are counted as a single “client.” Two or more legal organizations that have identical shareholders, partners, limited partners, members, or beneficiaries also will be treated as a single client.
U.S. Investor - An “investor” under this exemption is defined as any person who is a beneficial owner of a private fund or a general investor 'qualified purchaser'
This article is for general information purposes only - Vauban does not provide any legal advice.