New UK fund vehicle survives Brexit

United KingdomScotland
17/01/2017
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This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.

Summary and implications

Yesterday the UK government at last published the final text of a bill to create a new type of limited partnership in the UK, hopefully from 6 April this year (the private fund limited partnership, or PFLP).

The UK's limited partnership has been a Hercules of the international funds world since the 1980s. However it was invented in 1907, and other jurisdictions have since released LP vehicles designed specifically for the modern investment funds market. After many years of largely fruitless lobbying by the industry (including Nabarro) for a similar modernisation, the UK risked being left behind. That is until April last year, when the government announced plans for an update to the UK regime.

But then the Brexit vote happened, and LP reform risked sinking to the bottom of the government’s bucket of priorities. Yet Brexit probably gives even greater impetus to proposed enhancements of the UK’s corporate environment, and the government seems to be sticking to its pre-referendum pledge to maintain the UK limited partnership’s position at the cutting edge of fund technology.

This is quite an achievement for an ancient democracy of 65 million people, where stakeholder matrices and the legislative process are inherently more complex than in Luxembourg, in Delaware and offshore.

A summary of the key changes is available here. Please get in touch if you would like to discuss the implications.

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