Establishing a Private Equity Investment Fund in the UK

Background

A global private equity firm sought to establish an investment fund in the UK to attract institutional investors and take advantage of the UK's favorable regulatory environment. However, the firm required a tax-efficient legal structure while ensuring full compliance with the Financial Conduct Authority (FCA) and UK tax laws.

Challenges

• Ensuring compliance with UK Alternative Investment Fund Managers Directive (AIFMD).

• Optimizing fund structure to minimize tax liability.

• Addressing investor protection and fund governance requirements.

Solution

Treasure Well Law Associates provided a tailored fund structuring plan, which included:

• Establishing a UK-based Limited Partnership (LP) under the UK Limited Partnership Act, allowing tax transparency.

• Using a Luxembourg SPV to facilitate cross-border investments while benefiting from the UK-Luxembourg double taxation treaty.

• Assisting in obtaining FCA authorization for compliance with UK financial regulations.

Outcome

• The fund successfully raised £500 million from institutional investors.

• The structure allowed for capital gains tax efficiency.

• FCA approval ensured full regulatory compliance and investor confidence.