Sovereign Wealth Funds

Strategic legal counsel for sovereign investors

Sovereign wealth funds are reshaping global capital markets by pursuing multiple strategies, including public equity and fixed income allocations, as well as alternative investments such as private equity, private credit, real estate and infrastructure. Whether through committing capital to private funds as institutional investors or participating in co-investments, direct investments, preferred equity investments or lending transactions, developing a competitive alternatives program remains a key success strategy for sovereign wealth funds in today’s competitive and evolving market.

Why Dechert?

Dechert stands as a trusted advisor to some of the largest and most active sovereign wealth funds in the world. Our representation of sovereign wealth funds stretches back more than twenty years. As a result, sovereign wealth fund clients benefit from our detailed understanding of their unique structures, sensitivities and objectives relative to private capital firms. We work as one multidisciplinary team across the United States, Europe, the Middle East and Asia to anticipate their needs and efficiently resolve issues before they arise.

What sets us apart

360-degree perspective: We’ve sat on every side of the table – from former in-house counsel to advising financial sponsors and other asset managers in partnering with sovereign wealth funds and representing sovereign wealth funds on high-profile transactions – enabling us to anticipate counterparties’ priorities and deliver pragmatic solutions on complex matters.
Speed-to-market execution: Proven ability to structure and close complex, multi-jurisdictional transactions quickly in competitive deal environments.
Market-leading terms: Extensive experience negotiating investments, fund commitments and benchmarking terms to secure best-in-market positions for sovereign investors.
Integrated risk and regulatory platform: Multidisciplinary expertise in merger clearance (including merger control, national security and FSR), antitrust and anti-corruption for efficient risk analysis and compliance.
Tax optimization strategies: Creative solutions leveraging Section 892 and other exemptions to maximize tax efficiency globally.
Governance guidance: Advising on risk management, corporate governance, disclosure obligations, choice-of-law issues across jurisdictions and related regulatory and tax implications.
Seamless global reach: An integrated, on‑the‑ground presence that spots cross-border legal, regulatory and execution issues early and clears them quickly so sovereign wealth funds can act with confidence and close on their target timeline.

Proven results

Advised sovereign wealth funds on more than 100 cross-border investments valued at more than US$200 billion, including innovative co-investment, direct investment and secondary structures as well as private credit capital solutions transactions.
Negotiated fund commitments across private equity, private credit, real estate and alternative asset classes with favorable terms.
Successfully guided clients through complex merger reviews and national security clearance processes.
Recognized by Chambers, The Legal 500 and IFLR1000 for investment funds, cross-border transactions, financings, regulatory advice and disputes.

Key Contact

Mark E. Thierfelder

Partner \ New York
+1 212 698 3804 mark.thierfelder@dechert.com

Client Highlights

A sovereign wealth fund as part of an investor group in connection with the acquisition of a majority stake in a medical supply company, making it at the time the second-largest buyout since the financial crisis and one of the biggest healthcare buyouts ever.

A Taiwanese bank in its disposal of a portfolio of limited partnership interests to a syndicate of fund-of-funds and sovereign wealth fund investors as part of a stapled secondary transaction, structured as a sale to a new fund vehicle managed by an affiliate of the bank.

A sovereign wealth fund acquiring a commercial real estate mortgage loan (hospitality property), and related enforcement action by a non-affiliated mezzanine lender, addressing U.S. tax withholding issues arising from a foreign investor holding both debt and equity positions in the same investment.

A sovereign wealth fund as long-standing LP counsel on certain of its primary fund investments and co-investments sponsored by leading global private equity fund managers. In connection with each investment, we carry out due diligence on the fund documents and underlying transaction documents, advise on the negotiations of its extensive side letter, assist in the review of its subscription agreements and leverage our deep insight into market terms and provided commercial value-add by advising as to whether certain fund terms were unusual or off-market.

A sovereign wealth fund in its disposition of three trophy hospitality assets located in the United States, valued at US$1 billion.

A sovereign wealth fund in its acquisition of a substantial stake in a financial services business including multiple antitrust, FDI and financial regulatory approvals.

Various credit investment managers in their respective collaborations with global investment banks to launch new private credit investment platforms, which in each case received substantial anchor investments from sovereign wealth funds.

A sovereign wealth fund in its acquisition of a leading provider of cloud-based enterprise software solutions for medical groups and health systems nationwide in what was the second-largest PE buyout in 2022.

A sovereign wealth fund in its minority investment, together with another sovereign wealth fund, in a leading, privately owned commercial fire protection and security alarm service provider, joining existing investors.

A global asset management firm in connection with the formation of a business development company (BDC) involving a sovereign wealth fund as an anchor investor.

Sectors

Direct investments and co-investments: We represent sovereign wealth funds in some of the largest private equity transactions in the market, including what was at the time the second-largest private equity transaction since the global financial crisis. Whether domestic or cross-border, public or private, we help sovereign wealth funds structure complex transactions efficiently and effectively. Our interdisciplinary teams provide practical, commercial guidance tailored to sovereign investors’ unique governance and reputational considerations. In co-investments, we advise on consortium structures, governance rights, tax implications and exit strategies, delivering market-savvy solutions for complex deal-making.
Growth equity and structured capital:. We advise on growth equity investments to help facilitate the expansion, development and additional profitability of the targeted company. We also advise on structured capital transactions, combining deep knowledge of equity and debt markets with expertise in governance and covenant issues.

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Complex financing transactions: Dechert has advised private credit clients for more than 30 years, including sovereign wealth funds who have more recently entered the private credit space. With more than 80% of Private Debt Investor’s top 100 private credit firms as clients, we offer deep market knowledge and familiarity with the full spectrum of strategies and sub-strategies, including asset-based, distressed debt, permanent capital, direct lending, subordinated debt, specialty financing, special situations and venture debt.

M&A: With private credit market consolidation and strategic collaborations continuing to rise, we have played an active role in these market-shaping transactions, many of which have involved substantial investments from sovereign wealth funds, whether by anchoring new platforms or providing large-scale capital to independent start-ups in exchange for economics, governance rights and/or long-term access to attractive assets. As a leading law firm for financial services M&A, we have advised on countless M&A and other strategic transactions, helping asset managers and other financial services clients expand their product offerings, AUM or both.

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Commercial real estate finance: We represent sovereign wealth funds on a range of commercial real estate finance matters including mortgage and mezzanine debt origination; intercreditor, co-lender and participation arrangements; preferred equity financing; and loan modifications, restructurings, workouts and enforcement actions. We advise clients investing in a variety of commercial real estate asset classes, whether stabilized or transitional, including hospitality, retail, multifamily, office and condominium. We regularly play a central role in the industry’s largest and most high-profile transactions each year.
Real estate equity and M&A: We counsel sovereign wealth funds in connection with the acquisition, development, financing, leasing and disposition of all types of domestic and international real estate assets, as well as structuring complex real estate joint venture transactions and equity investments.

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Services

National security and FDI reviews: We guide sovereign wealth funds through the Committee on Foreign Investment in the United States (CFIUS) and similar foreign direct investment (FDI) review processes in the EU, the UK and other jurisdictions. We advise on deal structure and deal terms; help determine whether to bring a transaction before regulatory authorities; assemble the required information and materials for a filing; and, as appropriate and necessary, negotiate mitigation terms and national security agreements and guide companies with respect to monitoring and enforcement of such agreements.
Governance and compliance: We advise on risk management, corporate governance, disclosure obligations and related considerations around the world. Our guidance helps sovereign wealth funds balance risk and return while maintaining operational integrity.

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Tax structuring and global planning: Dechert delivers creative, tax-efficient solutions, including treaty and other foreign status exemptions and strategies to maximize tax efficiencies with respect to their investments on a global basis, including Section 892. We also counsel sovereign wealth funds on global tax planning that supports long-term returns and compliance across jurisdictions.

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Asset management: Dechert’s sovereign wealth fund capabilities are embedded within our globally recognized asset management practice, which serves many of the world’s largest fund complexes. Our experience spans all private asset classes and fund domiciles, enabling us to deliver jurisdiction-neutral advice tailored to sovereign investors. As the first law firm with a funds practice in all five principal European domiciles - UK, Ireland, Luxembourg, Germany and France - alongside deep capabilities in the U.S., Middle East and Asia, we provide sovereign wealth funds with 360-degree legal support across their entire investment lifecycle.

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Antitrust and merger clearance: Dechert’s antitrust team supports sovereign wealth funds in navigating merger control regimes across jurisdictions. Our antitrust lawyers have held leadership roles at antitrust enforcement agencies and have in-depth experience with the Federal Trade Commission (FTC), Department of Justice (DOJ), various state attorneys general, the European Commission (EC), the UK’s Competition and Market Authority (CMA), and other European enforcement agencies. We conduct risk assessments, prepare filings, and defend transactions before competition authorities and courts. Our experience spans multi-jurisdictional reviews, Phase II investigations and strategic advocacy to secure timely clearances.
EU Foreign Subsidy Reviews: The Foreign Subsidies Regulation (FSR), a new instrument that gives the European Commission powers to address distortive effects of non-EU subsidies on the EU market, adds another layer of transaction conditionality in the EU. Preparedness is crucial when dealing with the FSR and often creates an advantage in competitive deal processes. Our team streamlines the data collection process for FSR notifications to control deal timetables, long-stop dates and execution risk.

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National security advice: We know far more than the published regulations and guidance on a range of national security laws, including economic sanctions, export controls, outbound investment, anti-money laundering, anti-corruption, foreign investment and related areas. Our lawyers advise on the practical scope, interpretation, application and jurisdictional nuances of the rules and the discretion exercised on a variety of national security matters. We help sovereign wealth funds and their portfolio companies conduct transaction-related due diligence, establish and implement robust compliance programs, conduct internal investigations, defend against enforcement actions, and, where appropriate, negotiate settlements with regulators. We understand the reputational sensitivities and regulatory scrutiny sovereign wealth funds face and deliver discreet, effective solutions.

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Fund commitments: We represent limited partners and institutional investors, including sovereign wealth funds, in relation to their investments in a broad variety of funds, including private equity, private credit and real estate. Sovereign wealth funds benefit from our in-depth knowledge of the current state of fund terms, market trends and structural innovations gained by launching dozens of funds per year, representing fund sponsors and limited partners. Our cross-disciplinary team, including tax and antitrust, leverages our market experience to provide pragmatic and commercial advice for even the most technical of issues.
Secondaries: With nearly two decades of experience, we advise on the full spectrum of secondaries matters. Our LP-led secondaries team advises on buy-side and sell-side mandates across the private funds market, including advising on the world’s largest private credit secondaries transaction. For GP-led secondaries, we advise sponsors on single and multi-asset transactions and have extensive experience advising lead investors and syndicate investors participating in the continuation vehicle.
GP-stakes transactions: The combination of our market-leading M&A and private funds practices means we are expertly placed to advise clients (including sovereign wealth funds) on GP-stakes transactions and related asset management liquidity solutions. We advise investors on both minority investments and majority sales, and advise sponsors on a wide range of transactions.

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