How private equity can prepare for Brexit

As private equity funds and their investors prepare for Brexit, Invest Europe is today launching new resources to help firms understand the potential impacts and options for their decision making.

New Preparing for Brexit: Fund Structuring Webinars, starting today at 5pm CET, will provide insight into various EU jurisdiction options for relocating or setting up new private equity funds. Next month, the European private capital association will launch its fully updated Q&A publication, BREXIT: Technical and legal implications for private equity and venture capital.

''With the UK's exit from the European Union now potentially 18 months away, private equity, venture capital firms and their investors will be planning ahead,” said Michael Collins, CEO of Invest Europe. “We have been guiding our members on the potential issues since before the referendum vote, and these new and updated resources will help the industry adapt so it can keep raising capital, making investments and delivering strong returns.”

As Brexit negotiations intensify, UK-based private equity managers may be considering fund structures commonly used in the 27 remaining EU member states. The first of Invest Europe’s Preparing for Brexit: Fund Structuring Webinarstakes place today at 5pm and will focus on fund structures in France and Luxembourg. It will be followed on 19 October with an analysis of Germany, the Netherlands and Ireland. In each webinar, fund managers will have the opportunity to put their questions to a panel of local tax and legal specialists.

Invest Europe is updating its ''BREXIT: Technical and legal implications for private equity and venture capital” to cover the latest developments for fund managers and investors, for publication next month. The industry body initially published this member-only resource in April 2016, ahead of the UK’s EU referendum vote.

Key issues in the update include:

• An outline of the considerations involved in relocating operations and setting up new funds in the remaining EU jurisdictions

• Discussion of the issues for EU-based investors wishing to continue committing capital to UK funds

• The impact of Brexit on the European Investment Fund’s contributions to UK venture capital funds

• Post-Brexit considerations for UK and EU fund managers with pre-Brexit investments in each other’s jurisdictions 

Last year, European private equity fundraising hit €74 billion — its highest level since 2008, according to Invest Europe data. Total investments remained stable at over €53 billion — the second highest level since 2008 — with 6,000 European companies backed. About a third of this amount was invested cross-border. Private equity fund managers based in the UK contributed 29% of the total investment into companies based in the remaining 27 EU member states over the last five years.

Invest Europe is the association for European private equity, venture capital and their investors, and has 600 member firms across Europe. Members can find all of the Brexit resources here.