Private equity funds
We have an established funds formation practice acting for funds, sponsors, fund managers, investors and advisers. Whilst our focus is on unregulated funds, established in the UK, Germany and all the main offshore locations including Bermuda, BVI, Cayman Islands Jersey, Guernsey, Isle of Man, Ireland and Mauritius, we also act for authorised funds.
We act for fund investors in different European jurisdictions and other countries throughout the world. As a result we are involved with structures which are established to deal with the differing tax regimes of key investors' jurisdictions.
On behalf of prospective investors we review structures based in different jurisdictions, including the UK, and we also review all relevant documentation. As a result we are very familiar with all "first draft" provisions, the expectations of prospective investors, the type of amendments which are sought by them, the extent to which proposed amendments are acceptable, possible compromises and (to ensure adherence to sponsors' detailed requirements and timetable) participation in the negotiating process, involving a number of different parties in different jurisdictions.
When acting for sponsors, the key objectives for any proposed structure will include:
- tax transparency/exemption from capital gains and income tax i.e. no "double charge" to tax
- limited liability for investors
- operational simplicity
- "carry interest" tax efficiency
- VAT efficiency for management charges
- compliance with all regulatory requirements
There are always a number of fund structures which would meet these objectives.
These structures will involve a consideration of the principal jurisdictions in which investors will be based. To the extent that the tax laws of a particular jurisdiction create difficulties, by (for example) not regarding the fund entity as transparent, we may consider the creation of a parallel fund structure to avoid these issues.
We understand that investors come from many jurisdictions and we would be able to consider the tax implications for an investor from any particular jurisdiction to ensure that this is taken into account. By this means, we help to ensure that the potential investor base is maximised.
We are familiar with most structures involving the UK and other jurisdictions including Delaware, Guernsey, Jersey, Cayman Islands, Ireland and Luxembourg. We are also regularly involved with lawyers and accountants in these jurisdictions who are able to provide us with up-to-date local advice on structure, regulatory and tax issues.