Private equity funds are usually structured as off-shore limited partnerships. Investors become limited partners and agree to contribute a small amount of capital and to lend sums up to a specified amount. Investments are then made in target companies. When the investments are realised the investors’ loans are repaid first and any profit beyond that will be divided between the investors and the private equity management team in accordance with agreed profit sharing arrangements. The private equity house will be paid a management fee from the start and will be entitled to a performance related share of profits on realisation of investments, often referred to as “carried interest”.
In the context of private equity funds our team of specialist lawyers regularly advises individuals on a wide range of key issues including the following:
- what to look out for on joining a private equity firm, such as co-investment rights, track record, vesting and deferred compensation
- the consequences of being labelled as a good, bad or intermediate leaver
- exit strategy and safeguarding carried interest
Our recent experience includes advising members of an investment management team contemplating a move away from a private equity firm to join a competitor on their legal rights and obligations and the best way of ensuring treatment as good leavers in order to preserve carried interest on exit.
How Fox & Partners can help…
- we understand the sensitivities for private equity firms and individuals in addressing issues of underperformance and exits and provide confidential bespoke advice to our clients
- we aim to align our advice to our clients’ objectives and look for practical solutions whenever possible.
Please call us on 0207 618 2400