EU and USA Regulatory Platforms

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Regulatory Problem 1 - AIFMDThe member countries of the EU are quickly implementing the Alternative Investment Fund Managers Directive (AIFMD).

• Covers virtually any activity of all non-UCITS investment funds and their advisors, including merely having EU based investors.

• Considered more restrictive than Dodd-Frank, regulatory mandates mimic those of UCITS or mutual funds, which include Form PF-style reporting, depository requirements, and compensation limits (including for offshore funds/managers).

• Favors EU based funds and advisors for at least 5 years (and likely beyond) by exclusively granting them a “passport” to market throughout the EU under a single AIFMD registration and regulatory regime. Begins July 2013.

• All others must market through, and be subject to, country-by-country private placement regimes, which are quickly disappearing—including the EU’s largest market, Germany. Member nations are permitted to treat non-EU funds/managers more harshly than their AIFMD-approved neighbors, and are doing so by, for example, eliminating the reverse solicitation exception or banning offshore funds altogether (see, Holland, Italy, Germany, and France).

• The intent now and into the future is clear—the EU wants as much in the EU as possible, and will continue to make it hard to do otherwise.

• Upside to regulation? Access to EU institutional investors which cannot allocate to unregulated vehicles.

The Darian Capital Platform Fund

Offshore Fund’s EU Investors

Offshore Fund

OffshoreFund

Darian Capital Europe

(Dublin-based, Self-Managed Umbrella Fund)

White Labeled Offshore Fund Cell

Offshore Fund’s Marketers

Darian Capital Services Solution

Existing and future European investors of the offshore fund invest in Darian Capital’s AIFMD compliant Umbrella Fund through white-labeled sub-cell, which allocates to the designated offshore fund.

Benefits to Client• No need to independently suffer expense and delay to set up operations in Europe.

• No direct AIFMD compliance responsibility and little regulatory impact on operations.

• “Passport” to market to all of EU under single regulatory regime (including to retail investors in some EU countries) and avoid hostile country-by-country regimes.

• Fund cells under the Umbrella Fund are fully segregated, legally distinct entities reserved for each reference offshore fund. No overlapping liabilities.

Darian Capital Management, LLC

(SEC Advisor/Delegated

Portfolio Manager)

White Labeled Offshore Fund Cell

Regulatory Problem 2 – Dodd Frank

The Dodd-Frank financial reform act requires many non-U.S. advisors to register with the SEC, make certain financial disclosures (Form ADV for Registration and Form PF if a private fund manager), and establish and maintain a regulatory compliance program. Dodd-Frank impacts non-U.S. fund mangers who have:

• 15 or more clients in the U.S.;

•$25 million or more is assets attributable to those clients ($150 million if solely a private fund manager); or

• Held selves out as an advisor to the general public of the U.S.

Darian Capital Services Solution

Existing and future U.S investors of the non-US fund/manager invest in Darian Capital’s SEC compliant Advisor and Umbrella Fund, which allocates back to the Client funds.

Benefits to Client

• No direct SEC compliance responsibility, which is outsourced to Darian Capital Services.

• Ability to market to the U.S., including through general solicitations upon implementation of the JOBS Act.

• Fund cells under the Umbrella Fund are fully segregated, legally distinct entities reserved for each referenced Non-US fund/manager. No overlapping liabilities.

The Darian Capital Platform Fund

Non-US Fund’s US Investors

Non- US Fund

Non-US Fund

Darian Capital Europe

(Dublin-based, Self-Managed Umbrella Fund)

White Labeled Non-US

Fund Cell

Non-US Fund’s Marketers

Darian Capital Management, LLC

(SEC Advisor/Delegated

Portfolio Manager)

White Labeled Non-US

Fund Cell

Darian CapitalServices, LLC

(Compliance Advisor)

Our People

Daryoush Niknejad, JD - Managing Member Daryoush Niknejad is a investment advisory attorney who has served in-house and as outside counsel to registered investment advisors, venture capital firms, private equity firms, and broker-dealers. Most recently, he was Managing Director of Blue River Partners and its subsidiary, Steelbridge Compliance, where he filled the general counsel and chief compliance officer roles for numerous publicly registered and private fund managers, including BDCs, CLOs, and traditional hedge funds and private equity funds.

Prior to that, he was Associate General Counsel at Highland Capital Management, L.P., a multi-billion dollar investment advisor responsible for some of the world’s largest distressed asset funds, as well as various retail and private hedge funds, CLOs, and real estate funds. While at Highland, he helped design, build-out, and test the firm’s compliance platform while also advising on derivatives trading, litigation management, and myriad strategic relationships and agreements. Mr. Niknejad also served as Associate General Counsel at IP Navigation Group, LLC, a technology-focused private equity firm, where he was also General Counsel to its various portfolio companies. While at IP Nav, he was the sole attorney responsible for technology licensing, due diligence, and regulatory compliance.

He is a graduate of UCLA and the University of Texas School of Law, and a member of Texas and California bars.

Our People Nathan J. Hard, JD – European Counsel

Mr. Hard is a New York State licensed attorney, who has been an independent consultant in Germany since 2006. He has advised European based law firms, financial institutions, advertising and publishing firms, and cutting-edge technology companies on the interaction between United States law and the laws of the European Union and its member countries, including on issues relating to corporate entity formation and regulation and appropriate fund structures. He has also advised non-European Union based entities on establishing operations in Europe, while maintaining tax efficiency and navigating marketing regulations.

Prior to moving to Europe, Mr. Hard was an associate at Rivkin Radler LLP in New York where he advised Fortune 500 companies on contract disputes, insurance matters, toxic tort, and environmental issues. He was also an associate with Sandbote & Waggoner, P.C. in Dallas, Texas where he represented regional and national insurance carriers.

Mr. Hard resides in Berlin, Germany with his wife and children, and is fluent in German language and business culture. In addition to his professional pursuits, he volunteers with Lawyers Without Borders, an organization that provides pro bono legal services for the advancement of the rule of law and economic development throughout the world.

Mr. Hard is a graduate of Tulane University and the University of Texas School of Law.

Our People

Legal CounselPaul Farrell – Partner, Walkers Ireland

Paul Farrell is a partner in Walkers’ Global Investment Funds Group and is based in the Dublin office. Paul specializes in the legal and regulatory issues surrounding the establishment and maintenance of Irish mutual and alternative investment funds structured as UCITS funds, non-UCITS retail funds, professional investor funds (PIFs) and qualifying investor funds (QIFs) including exchange traded funds (ETFs), managed-account platforms, money market funds, master-feeder funds, alternative investment funds and the re-domiciliation of funds to Ireland.

Prior Employment ExperiencePrior to joining Walkers, Paul was a senior partner in the Asset Management practice of a big five Dublin law firm leading its alternative investment arm. Paul has been advising on legal and regulatory issues in the Irish funds industry for over 13 years.

Boards And AssociationsPaul is a member of the Incorporated Law Society of Ireland.