How we work · the opening
The first fortnight.
An engagement opens on your documents rather than on ours. This page states what arrives, what we ask for, what returns first, and what the second week settles before any structure is drawn.
Two stages of the method run here: define the objective, map the environment. Nothing is designed in the first fortnight, and that is the whole use of it.
01 · What arrives
When to involve usA matter arrives as an objective and an uncertainty, and the uncertainty is rarely about a rule.
A matter reaches this firm with the separate questions already answered. Counsel answered a legal question. The tax adviser answered a tax question. Both answers stand and neither is reopened here. What arrives is the question that sat between them, which nobody was appointed to hold.
- An objective, stated commercially
Exposure to an asset. Co-investors alongside the fund. A continuation vehicle taking three of the seven positions. Stated that way an objective is not yet structural: it does not say whether the fund needs ownership or economic exposure, control or influence, income or appreciation, permanence or a defined duration. Separating those is the first stage of the method and the first work of the fortnight.
- A shape, drawn or half drawn
A diagram from an earlier conversation, a structure that worked on the last transaction and is being reused, or two boxes and an arrow. It is read as evidence of what has already been assumed rather than as a settled design, because the assumptions inside it are usually the thing under examination.
- A jurisdiction or two, and often a third nobody has counted
The centre the fund sits in, the country the asset sits in, and the countries the investors write from. The third arrives late, because it is carried by the investor base rather than by the structure, and it is the one that decides where an approach may be made at all.
- A term sheet at some stage of agreement
Signed, initialled, marked up, or still sitting in one party's drafting. Which is which matters more than what it says. An unagreed term is a route still open; an agreed one is a constraint on everything drawn after it, and the two are read differently from the first day.
- A question no single adviser closes
Can we hold it this way is answered cleanly by counsel. Can we hold it this way, given the fund documents as executed, the facility already signed, the investors already admitted and the exit already described to them, is not a question any one of them was asked.
An objective and an uncertainty are enough to open on. A preferred structure is not required, and where one arrives it is examined rather than adopted.
02 · What we ask for
Stage two · mapWe ask for what exists, not for what is intended.
Eight things, and the note against each says what it changes rather than what it is. All eight already exist on your side of the table. Nothing on the list has to be written for us, and nothing on it is asked for a second time.
Three of the eight are rarely sent unasked, and each of the three can close a route that every other document says is open: the side letters, the entities nobody has looked at recently, and the advice you disagree with.
The partnership agreement, the articles, the fund rules and the offering document in the form they were signed, not the form the next amendment will produce. An investment restriction, a borrowing limit, a concentration cap or a consent threshold in an executed document binds before any regulator does, and it binds whether or not it has been read against this transaction.
Side letters are where the constraints nobody remembers live: a most-favoured-nation clause, an excuse right, a transfer restriction, a prohibition on a particular jurisdiction or instrument. They are rarely circulated with the fund documents, and they are frequently the reason a clean route is not available.
Which investors are classified as professional in the centre they subscribe from, which are restricted by their own home regime in what they may hold, which cannot take a particular instrument, and which are already excused from a category of asset. No names are needed for any of that. Classification decides which vehicle and which tier are available, and it decides where an approach may lawfully be made. Which territory permits which approach, and by whom, is read at marketing and placement.
Facility agreements, term sheets, the security already granted and the covenants already given. Security that exists ranks ahead of a structure that does not exist yet, and a covenant given two years ago can close a route that is otherwise clean. Debt introduced later into a structure designed without it changes the security, the flows and the order of the steps.
Not the timetable, but the mark against each line of it. A date fixed by an instrument, by a counterparty or by an authority working its own cycle binds. A date fixed by internal preference moves when it has to move. The two are written identically in a plan and only one of them can carry a sequence, so we ask you to say which is which. This is the only input on the list that changes what is possible rather than what is preferable.
Not only who counsel, the administrator, the depositary, the lender and the auditor are, but the scope each of them holds. An administrator engaged for a single vehicle is a different constraint from one engaged for a platform, and counsel retained on the acquisition is not counsel retained on the fund. The scope of an existing appointment decides which question can be put to whom without a new instruction, and that is the fact the order of the questions is built on.
Including the vehicles that are dormant, the ones formed for a transaction that did not complete, and the ones nobody has looked at in two years. An existing entity is sometimes the shortest route to the exposure and sometimes the thing that closes it, and the second is discovered only by reading the chain rather than the intention behind it.
Where two of your advisers took different views of one question, the difference is usually the structural question in the transaction. A disagreement between advisers is evidence, and it is the evidence most often lost when a file is tidied before it is sent.
Nothing above is asked for completeness. Each of the eight is asked because a structure drawn without it would have to be drawn again.
03 · The shape of the opening
How we workThe opening has an order, and the order is what makes it short.
Six moves, in this sequence. A fortnight is a shape rather than a date: three jurisdictions and a signed facility take longer to read than one vehicle in one centre. What does not move with the reading is the order the six run in.
- 01 The matter is bounded The first conversation produces one sentence: what is being decided, by when, and what closes it. It is written down, it governs the engagement, and it is the only thing here produced before a document has been read. Everything after it is read against that sentence, which is why it is worth an hour of argument on the day it is written.
- 02 The documents come across Everything in section two, as it stands. What cannot be produced is named rather than assumed, because a structure drawn against a document nobody has seen is a structure drawn against a recollection of it.
- 03 The reading Each document is read against the objective rather than summarised. The question is not what a document says. It is what the document forbids, what it makes conditional on a consent, and which of its terms was drafted against a version of a rule that has since moved.
- 04 The problem is stated back The first thing that returns, and it is not a structure. It is the problem restated in structural terms with the binding constraints set out beside it, in a form that can be contradicted. What it contains is set out in section four.
- 05 The argument You disagree with part of it, and that is the use of the statement rather than a fault in it. A problem stated wrongly and agreed quietly survives every stage after it. A problem stated wrongly and argued with is corrected in a sentence.
- 06 The universe narrows Routes that cannot survive the binding constraints are named and set aside, each with the constraint that removed it. What remains is the set of structures still worth drawing. Drawing them is stage three of the method, and it begins after the fortnight rather than inside it.
Nothing is designed in the first fortnight. Two stages of the method run in it, and both of them run before any structure exists to compare.
04 · What comes back first
The blueprintWhat returns first is the problem, not an answer to it.
It is a statement of the problem in a form you can argue with, and it is not a second document. An engagement produces one artefact, and this is the opening of it, written before the layers of the blueprint that need a structure in order to be drawn at all. It carries four things: the objective restated structurally, the constraints already binding, the routes already closed, and the questions that have to be answered before anything is designed.
It is short, and it says nothing about this firm. It exists to be contradicted while contradiction is still a sentence.
A problem stated wrongly and agreed quietly is the one error that survives every stage after it. A structure can be drawn against the wrong problem, compared against it and stress-tested against it, and each of those steps will be performed correctly.
- The objective, restated structurally
What began as exposure to an asset is separated into ownership or economic exposure, control or influence, income or appreciation, permanence or defined duration, and the liquidity the fund needs together with the point at which it needs it. Each of those answers changes the set of structures available, which is why the restatement comes before the structures rather than after them.
- The constraints, separated into binding and assumed
A binding constraint resolves to an instrument: a clause in your own documents, a provision of a rulebook, a covenant in a facility, a term already agreed. An assumed constraint resolves to a conversation. They are listed apart, because a good deal of what a transaction believes about itself at this point is the second kind, and an assumed constraint that turns out not to be real is a route recovered.
- The routes already closed
Structures that cannot survive the binding constraints, each recorded with the constraint that removed it rather than quietly omitted. A route removed without a stated reason returns to the table three weeks later, usually raised by somebody who was not in the first conversation, and answering it a second time puts the sequence back a stage.
- The questions that come first, in order
What has to be answered before anything else can be, who owns each question, and what changes depending on the answer. A legal question is written for your counsel with the structural consequence of each answer attached, so that the answer arrives already connected to the structure instead of arriving as a position somebody then has to translate. What counsel is handed.
If the statement is not your problem, the correction is a sentence. If it is not your problem and nobody says so, the correction is every drawing made after it.
05 · What the second week settles
The one-way doors · the three classesBy the close of the second week the ground is fixed, and nothing has been chosen.
Six things are settled. None of the six is a structure, and each of them narrows what the four remaining stages of the method can still consider.
The state at the close of the fortnight
- 01The problemstated in structural terms and accepted on both sides, or amended until it isAgreed
- 02The binding constraintseach cited to the clause, provision or covenant that creates it, and datedCited
- 03The assumptionsseparated out, marked as assumptions, and each given the party who would have to confirm itNamed
- 04The routes already goneset aside with the constraint that removed each one, and kept in the file rather than forgottenRecorded
- 05The order of the questionswhich have to be answered before which others, and who owns each of themSequenced
- 06The dates that are realseparated from the dates that are hoped for, each one carrying whatever it is that makes it bindFixed
None of the six is a decision about the transaction. Each is a statement about the ground the transaction stands on, and the reason they come first is that a decision taken before them is a decision taken on a guess about all six.
A manager holding those six can brief its own counsel without a second conversation. That is the working test of whether the fortnight closed.
06 · What stays open on purpose
Decision ownershipFour things are left standing at the close, and settling them early is how an opening goes wrong.
Each of the four belongs to somebody. In three cases that somebody is not this firm, and in the fourth it is a stage of the method that has not run yet.
The route stays open until the comparison selects one. Routes are drawn to the same depth at stage three and set against thirteen structural axes at stage four. A route named in the fortnight enters the file as the reference the others are then measured against, and nothing later in the method takes it back out of that position.
The legal position stays with your counsel. Where a structure turns on a question of law, the question is written for counsel with the structural consequence of each answer set beside it, so what comes back is an opinion on a bounded point rather than a view on a whole transaction. What each answer would do to the structure is ours to map.
The merits stay with the manager. The fortnight settles how an exposure could be built and what each way of building it asks of the structure. Whether the fund wants the exposure at all is untouched by any of it, and the two questions are held apart on purpose: two kinds of risk.
The regulator's answer stays the regulator's. Where a structure requires a notification, a registration or an application, the requirement is identified, the instrument that creates it is cited, and the step goes into the order with the party who files it named against it. What the authority will do with it stands as an open step rather than an assumed one, because a sequence resting on an assumed answer carries a step nobody owns.
Three of the four close on somebody else's signature. The fourth closes when the comparison has run, and not before.
07 · The handover to the method
The stages in fullThe fortnight is stages one and two. Four remain, and each starts from what the fortnight fixed.
Define the objective and map the environment are complete at the close of the second week. What they hand forward is what each of the four stages after them starts from, and in every case it is something already cited rather than something still being assembled.
Design
Routes are drawn against a problem already agreed and a constraint set already cited, so the structures that appear are the ones capable of surviving rather than the ones that came to mind first.
Compare
The axes are read against a fixed objective. Where the objective moves the comparison moves with it, which is why ownership, exposure, control, income, duration and liquidity are separated in the fortnight rather than at the comparison.
Stress-test
Eight questions are put to the surviving route. Several of them are questions about constraints, and the constraints were cited during the fortnight rather than assembled at the moment of testing.
Mobilise
Every open question already carries an owner and a place in the order, so the implementation framework sequences work that has already been attributed instead of attributing it late.
We take a transaction through structural design and execution-readiness. Execution, the regulated activities inside it, and every position that has to be signed remain with the manager, its counsel and the counterparties it appoints, each acting in its own name.
The first fortnight does not produce a structure. It produces the conditions under which the structures worth drawing can be told from the rest.
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Complex transactions fail at the interfaces between otherwise workable components. We resolve the structural complexity between investment intent and transaction execution.
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