Private Equity

Whilst the private equity sector is constantly evolving, we are attuned to the issues and the specific concerns that confront private equity executives in both their personal and business affairs.

Private equity professionals have investments that comprise of interests in the Private Equity firm where they are a member, together with interest in the investments of the funds into which that firm invests. These arrangements can include the way a firm is owned, which can be complex and intricate. We support our clients through the journey and provide holistic advice in personal affairs, investments (including carried interest) and partnership shares.

When a new fund is incepted we work to ensure that structuring is appropriately considered.  When carried interest payments are made from a fund, we advise on how those funds can be protected for your family.

How we help

• Personal Tax & Estate Succession
  We provide legal advice to private equity partners, entrepreneurs and other shareholders who are structuring and investing their wealth, and are particularly skilled at guiding them on the best way to structure their assets to suit their particular situation. This includes advising on personal taxation in the context of private equity funds and how to structure management fees and carry. It also includes advising on structuring for these businesses from both a tax and succession perspective.
• Corporate
  We advise fast growing, entrepreneurial companies, funds and family businesses on issues affecting all aspects and states of a company’s development. Our work involves joint ventures, corporate finance, venture capital investments and private capital transactions.
• Employment
  We have considerable experience advising senior investment professionals  on employment law and remuneration issues in the private equity and venture capital sector, and particular experience advising on the regulatory landscape that applies.  The team has an excellent track record of negotiating favourable terms for executives when they join or leave.
• Family
  Our family team were involved in the leading authority case on the treatment of carried interest by the Family Courts on divorce. They regularly advise private equity clients on the implications of marriage, divorce risk and on how their carried interest and co-investment in funds will be considered and dealt with in the event of a marriage breakdown. The team has particular expertise to advise on the potential benefits of signing pre- and post-nuptial agreements with a view to protecting such wealth.
• Residential Property and Agricultural Land
  Our leading residential property team advise on the sale and purchase of prime central London properties and high value rural properties and estates, whether this is to provide a new home or for investment. Agricultural land is a popular investment at the current time and our team are regularly advising our clients on largescale investment in land.

Recent highlights

Private Client

• Advising a UK tax resident on his arrangements with various private equity funds, and the extent to which (i) his services (and the fees provided) are covered by the special tax rules on management fees and carried interest; and (ii) if those rules are in point, how to mitigate their effect.
• Advising a private equity principal on the creation of a non-UK tax resident trust prior to being deemed UK domiciled for UK tax purposes, with the aim of it acquiring carried interest from him (for market value) without invoking anti-avoidance rules that would otherwise deem the structure’s profits to arise to him for UK tax purposes.

Employment

• Advising a senior investment professional on his exit from an early stage venture capital fund under a settlement agreement including negotiating the following:
  • favourable leaver status in relation to his carried interest in two funds,
  • favourable terms in relation to the payment of bonus and severance, and
  • a full release from the non-compete restrictions in the fund documents and his employment contract.
• Acting for various private equity firms on the recruitment and dismissal of investment professionals and advising on employment and employment-regulatory issues, as well as leaver provisions in carried interest and co-invest documents.

Family

• Acting for the husband on his divorce and financial remedy proceedings. The wife was the managing director at a private equity house and had carried interest entitlements in two funds. Partway through the proceedings she lost her job, so our family and employment teams worked together to review her potential claims against her former employer to ensure that she was seeking to maximise her carried interest entitlement as part of her settlement agreement.
• Advising a senior partner at a private equity firm on his divorce in which his wife sought to make claims in relation to his carried interest in three funds. The case ultimately proceeded to trial in the High Court where the Judge had to determine her claims. The Judge found in the husband’s favour and determined that the wife’s % share of the carried interest entitlement from each fund should be limited to reflect the relevant stage of the life cycle of each fund at the point of the parties’ separation and to reflect the endeavours required by the husband post-separation to bring the carried interest to fruition.