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The UK's post-Brexit success depends, among other things, on the ability to attract foreign investors to the private sector. The establishment of the UK  private equity fund contributes to the development of the investment market, in which the country is now interested.

The greatest role in attracting investment is played by macroeconomic factors, including the capacity of the domestic market, currency stability, political stability, the level of infrastructure development, and the availability of skilled labor.

An essential factor is the UK investment policy, which provides guarantees for foreign investors, the effective and stable functioning of the legal system. Investment policy determines the specifics of the directions and means of regulating the admission of foreign investments into the host economy, as well as the means of stimulating their attraction. By all possible means, including regulatory ones, Great Britain is trying to stimulate foreign capital flows into the country as much as possible, but with sober judgment inherent in this state.

To strangers with care

In England, they are wary of determining the range of rights of a partner in a partnership. The establishment of an English limited partnership (ELP) implies that the LP (foreign limited partner in the partnership) will be responsible for the partnership's debts. The partner is not allowed to receive or return their capital during the operation of ELP.

The legislation governing the establishment of an ELP in the United Kingdom does not provide for the conversion of a foreign foundation into an ELP. The vast majority of the terms governing an ELP can be negotiated by the parties on a contractual basis (such as a limited partnership agreement).

In case of insolvency

In England, even if the LP is declared insolvent, it will still not lead to automatic liquidation of the partnership. If the General Partner (GP) becomes insolvent, then in the vast majority of cases, LP has every right to appoint a new GP.

Manager licensing

An AIF fund manager that is physically located in the UK and is responsible for portfolio and risk management must obtain an Alternative Investment Fund Manager (AIFM) license from the Financial Conduct Authority.

An asset manager in the UK who does not act as an AIFM but provides advisory services or manages separate accounts must be licensed with the FCA under MiFID II.

Note:

If you are interested in the possibility of obtaining an ELP UK Governor's License, please note that the structure of the fund grants the manager the authority of a separate entity that has sufficient autonomy but is nevertheless closely tied to the GP.

AML requirements

If you are planning to register a financial institution in the UK, we recommend that you familiarize yourself with UK Customer Due Diligence (CDD) requirements in advance. 

First, thoroughly verify the identity of the client for possible involvement in money laundering schemes.

Second, companies are required to obtain and store information about their beneficial owners. The UK has complied with this requirement by introducing the Company Controlling Persons regime.

Third, firms are required to keep records of documents collected in accordance with CDD obligations for five years after the end of the business relationship.

Exchange listing

Private equity funds may well be listed on the UK stock exchange such as the London Stock Exchange (LSE) and the LSE special funds market.

Registration of a private equity fund on the LSE provides a number of benefits, including access to “fixed capital”. This creates the prerequisites for investing in long-term assets in the UK.

Final word

Britain has entered a decade of potentially profound structural change. In the years following Brexit, the UK will desperately need foreign investment to fix the economy. So, setting up an investment fund in the UK now is a great idea. Contact our legal professionals if you require assistance. We have extensive and deep knowledge of English law and the necessary practical experience to make this process as smooth and fast as possible.