News | Private Equity

SJ Berwin Lobbying Wins Exemption from 20 Partner Limit

Friday 22nd February 2002

SJ Berwin's private equity team has secured an important exemption from the 20 partner limit for certain types of investment fund. The new exemption, which will come into force on 22 March, will allow qualifying funds to operate with more than 20 partners without the need to use complex structuring techniques, and represents an important step in a concerted lobbying campaign which began in the 1980s.

Most private equity funds are structured as limited partnerships, for a variety of tax and regulatory reasons. In the UK, general and limited partnerships are subject to a legal maximum of 20 partners (subject to certain exemptions, mainly for professional partnerships) and that restriction has been a nuisance for UK investment funds. In practice it has been possible to structure funds to circumvent the limit, but this has been inconvenient, and SJ Berwin and the industry has lobbied for many years to have the restriction removed.

Last year the Government announced that it was to remove the limit for all partnerships and limited partnerships, but that change has yet to go through the Parliamentary process. At the same time as pushing for the general change, SJ Berwin has been discussing a narrower exemption with the Department of Trade and Industry, which would apply to investment funds which are classed as "collective investment schemes" for regulatory purposes and are managed by an authorised entity. It is that exemption which will be brought into effect on 22 March.

Whilst that change is not sufficient to cover all investment funds, there are a large number which will be able to take immediate advantage of it.


Notes:
  • SJ Berwin is a full-service international legal practice with more than 470 lawyers across its offices in London, Brussels, Frankfurt, Berlin, Munich, Madrid and Paris.
  • With a dedicated European private equity team comprising over 140 full-time corporate private equity lawyers together with support from its other departments, SJ Berwin advises clients on the full-range of private equity business, both in connection with the establishment of private equity funds and their associated incentive schemes, and on MBOs, MBIs, public-to-privates and venture capital investments.
  • SJ Berwin has recently been shortlisted for the Legal Business Awards 2002 in the categories of corporate, property, and planning, as well as for "Most Enterprising Law Firm of the Year". It has also been nominated for the UK Technology Awards 2002 "UK Technology Law Firm of the Year".
  • SJ Berwin has recently won the European Venture Capital Journal Award for Private Equity Law Firm of the Year 2000, Law Firm of the Year and Property Team of the Year at The Lawyer Awards 2000, and Competition Team of the Year at the Legal Business Awards 2000.
 
Read more Back to news