“Succession Planning Series: A Blueprint for Hedge Fund Founders Seeking to Pass Along the Firm to the Next Generation of Leaders” by Scott C. Budlong, William Orbe and Kenneth Werner published by The Hedge Fund Law Report

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November 21, 2013

A generation of hedge fund founders is arriving at a crossroads.  By one estimate, around $600 billion of the industry’s assets are managed by firms whose founding principals will reach at least their sixties in the next decade. As they begin to contemplate retirement or devoting time to other projects, founders are considering a fundamental question: Do I want the firm to continue after I leave the stage?

In “Succession Planning Series: A Blueprint for Hedge Fund Founders Seeking to Pass Along the Firm to the Next Generation of Leaders,” Richards Kibbe & Orbe LLP partners Scott C. Budlong, William Q. Orbe and Kenneth E. Werner discuss the approach known as institutionalization, which involves bequeathing a free-standing franchise to the manager’s remaining principals and employees. 

The article addresses the imperative of advance planning for leadership transitions; choosing new leaders; the treatment of the founder’s economic interest in the firm; retaining and motivating key talent; and a variety of issues concerning succession execution, including investor communications, consent issues and key-man provisions in partnership agreements.

Click here to read “Succession Planning Series: A Blueprint for Hedge Fund Founders Seeking to Pass Along the Firm to the Next Generation of Leaders.”