“I know firsthand what sponsors are looking for in their fund counsel. I think that’s an attribute that a lot of traditional outside counsel don’t have.”
Joining a big law firm was the last thing on Emily Stephens’s mind when she reached out to V&E partner John Grand last September. Stephens, a 14-year veteran of V&E client Oaktree Capital Management, was getting ready to launch her own law firm advising fund sponsors on fund formation. She was hoping Grand, who represents private equity firms on their investments, might provide some referrals.
But as they spoke, Grand had a different idea for Stephens: Would she be interested in joining V&E?
“I realized it was an amazing opportunity,” Stephens said. “I’ve worked with V&E a lot over the past few years when I was at Oaktree and I found the lawyers to be some of the smartest I’ve ever worked with in my career. Having the support of V&E would allow me to build what I wanted to build so much faster and hopefully make it a lot more successful.”
In November, less than two months after that initial conversation, Stephens joined V&E as a partner in the firm’s San Francisco office, where she’s representing fund sponsors in the formation and operation of private commingled investment funds, funds-of-one, and separately managed accounts.
In hiring Stephens, V&E has added a partner who can play an important part in expanding V&E’s Investment Funds practice. During her tenure at Oaktree – a leading global alternative investment management firm — she held managing director roles, serving both as an in-house lawyer and as a member of Oaktree’s flagship distressed debt investing team. As a result, Stephens brings broad and deep experience that sets her apart from other outside counsel.
“I know firsthand what sponsors are looking for in their fund counsel. I think that’s an attribute that a lot of traditional outside counsel don’t have,” Stephens said. “They don’t know the demand that your investment team members bring to you when they want to get some restricted information. Or when they want to start investing in something that might not have been contemplated by the original investment guidelines. I dealt with all of that. I was on the frontline.”
Raising funds for the world’s largest closed-end distressed debt fund
At Oaktree, Stephens participated in all aspects of fundraising for several of the firm’s largest funds, including OCM Opportunities Fund VIIb, which was, at the time, the world’s largest closed-end distressed debt fund with $10.9 billion in capital commitments. She also served as an investment team member and as lead lawyer for Oaktree’s flagship investment strategy focused on distressed credit opportunities.
Among her many skills, Stephens knows how to reduce complexity for fund sponsors and their investors. That ability was on display when she was raising capital for what would eventually become OCM Opportunities Fund VIIb.
Originally Oaktree intended to raise OCM Opportunities Fund VIIb only after OCM Opportunities Fund VII. But as commitments flooded in, Oaktree made the decision to raise OCM Opportunities Fund VIIb on an anticipatory basis alongside OCM Opportunities Fund VII. That required a complex and labor-intensive process.
“I had to figure out a way to make it as streamlined as possible because if there’s anything investors don’t like, it’s doing a ton of paperwork,” Stephens said.
An early affinity for intellectual analysis
A native of Crosby, Texas, Stephens discovered that she loved debating while in high school, an interest that would eventually lead her to law school.
“I love the intellectual analysis of argumentation,” she said.
Stephens went on to attend Dartmouth College and The University of Texas School of Law. She began her legal career at Munger, Tolles & Olson, where she initially represented entertainment clients, but eventually shifted her focus to advising investment management firms.
A desire to go in-house led Stephens to Trust Company of the West, where she advised mezzanine, distressed debt and hedge funds on fund formation matters. When a former Munger Tolles partner joined Oaktree as general counsel and looked to expand the legal team, Stephens joined him there.
Bringing a women’s perspective to investments
Stephens worked as an in-house lawyer for eight years before making the transition to the business side. While that’s an accomplishment in and of itself, it’s all the more impressive given that women are underrepresented in alternative asset management.
“I think Oaktree really benefited because my perspective, when analyzing a company, was often very different from that of my male colleagues,” Stephens said. “But it was a very important perspective to have when figuring out whether the risk/reward in making an investment was appropriate. I think women often times better anticipate emotion-based reactions and market perceptions, both of which are invaluable in making investment decisions.”
Working at Oaktree not only afforded Stephens a front row seat at a prominent alternative asset management firm, but it also provided her with extensive experience serving on corporate boards. To date, Stephens has served on approximately 20 corporate boards, including the boards of three public companies, which she thinks will be invaluable to her practice as she assists investment funds with their ongoing operations, including managing their portfolio investments.
“I consider myself fortunate that I was in a position where I could be named to a board. I don’t think a lot of women have had that opportunity,” she said. “And having first-hand knowledge of how a business is run allows me to better assist our fund clients with their own investments.”
Goal: Making V&E a fund formation hub
After leaving Oaktree earlier this year, Stephens worked briefly at a startup, before deciding she wanted to be an entrepreneur herself and start her own firm. While she ultimately chose not to hang her own shingle, she intends to use her entrepreneurial spirit in helping to expand V&E’s Investment Funds practice.
“The immediate goal is to let fund clients know that V&E can service them from inception, through their investing period, to their harvesting period, to liquidation,” she added. “We can be their one-stop shop.”