A transatlantic team of Kaye Scholer investment management and tax lawyers recently advised Highgate Capital Management LLP on the formation of its inaugural fund, Highgate Capital Fund. The fund, announced October 28, has a hard cap of $500 million.
The fund will invest, on a long-only basis, in the equity of undervalued listed companies in the natural resources (oil and gas and mining) sector. There will be no use of short-selling, leverage, or derivatives. The fund will essentially apply a private equity styled investment approach to the public markets, with the objective of improving operational performance, as well as corporate governance, strategy and structure.
Highgate Capital Fund’s structure reflects the investment objective and utilizes a Cayman Islands master fund with a Cayman Islands feeder fund and a Delaware limited partnership feeder fund for US investors. The fund’s strategy is supported by an overflow co-investment vehicle (a Cayman SPC) which will be raising money on an ‘as and when needed’ basis, for deals of a size which cannot, or should not, be met by the main fund in full.
London-based Highgate Capital Management is led by a trio of special situations professionals. Former Worldview Capital partner and Head of Special Situations and Head of Oil and Gas Andrey Kruglykhin is leading the venture, alongside ex-Credit Suisse Natural Resources Distressed Specialist Pavel Moutchiev and ex-Audley Capital CFO Ahmed Obaydi.
The Kaye Scholer team for this matter included London-based client-relationship partners Simon Firth, who led the team, and Daniel Lewin; New York-based Investment Management partner Stephen Culhane and associate Emma Brady, who advised on the Delaware feeder fund formation and documentation; New York-based Tax partners David Sausen and Willys Schneider and associate Sarah Soloveichik, who advised on US tax aspects; New York-based Tax counsel Kathleen Wechter, who advised on ERISA; and Sonali de Zoysa Gunasekera (trainee, London), who assisted throughout.
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