investment management practice

The Investment Management Practice ("IMP") is part of Bowman Gilfillan's Banking, Insurance and Financial Services Group and provides advice to domestic and international clients in relation to the legal aspects of investment management and investment funds.

By investment management we mean the professional management of various securities (shares, bonds etc) and assets (e.g. real estate) to meet specified investment goals for the benefit of investors. This phrase is often used interchangeably with "asset management". However, "asset management" refers to the investment management of collective investments, whilst the more generic "investment management" refers to all forms of institutional investment and investment management for private investors.

In order to facilitate investments, a variety of investment structures may be set up to invest in different types of assets. The structures, which are commonly referred to as investment funds, are investment pooling vehicles through which a group of investors gain exposure to a spread of investments selected in accordance with a particular investment policy, which is supervised and implemented by a professional third party fund manager.

Investors may be institutions (insurance companies, pension funds, corporations etc) or private investors (both directly via investment contracts and indirectly through collective investment schemes).

In South Africa, investment management falls under the supervision of the Financial Services Board. The legislative framework applicable to investment management and investment funds includes, among others, the following:

• Collective Investment Schemes Control Act 45 of 2002;
• Financial Advisory and Intermediary Services Act 37 of 2002;
• Financial Institutions (Protection of Funds) Act 28 of 2001;
• Inspection of Financial Institutions Act 80 of 1998;
• Pension Funds Act 24 of 1956;
• Securities Services Act 36 of 1996;
• JSE Equities Rules and Directives; and
• Rules of STRATE Limited.

expertise

In essence, the IMP offers legal advice in relation to all legal aspects of investment management and investment funds. In particular, the IMP advises on:

• establishing collective investment schemes, hedge funds and other structured funds;
• legislation and regulations affecting investment funds, investment/asset managers and investors;
• drafting and negotiating investment management agreements, investment advisory agreements and dealing agreements;
• custodial arrangements, including STRATE rules;
• securities trading and securities lending arrangements;
• reviewing prospectuses and private placement memoranda;
• subscription for interest in investment funds and the negotiation of side letters in relation to such subscriptions;
• legal due diligence in relation to investment management and investment funds;
• the investment of pension fund assets; and
• tax laws affecting investment funds and their investors;

he IMP also advises a number of foreign investment funds in relation to doing business in South Africa. In particular, we advise foreign investment managers on soliciting investment from South African investors. The IMP has a particular competence in dealing with the Financial Services Board (the regulator responsible for approving the operation of foreign domiciled investment funds in South Africa).

The IMP works closely with other practice groups in order to provide integrated advice to clients, e.g. the Banking, Insurance and Financial Services Group, the Corporate and Commercial practice area, the Employee Benefits practice area and the Tax practice area.