Funds Update | October 2018

Written on 15 Oct 2018

Welcome to the latest edition of Osborne Clarke’s Funds Update.

We hope that you find it interesting. If you would like to discuss any of the content, or have a subject that you would like us to cover in a future edition, please let one of us know. Our contact details are set out below.

The PRI’s ESG Monitoring and Reporting in Private Equity

Since the launch of the United Nations’ six principles of responsible investment initiative in 2006, institutional investors are continuing to push for responsible investment and the incorporation of ESG factors into mainstream investment practice. With the number of signatories to the six principles skyrocketing from 63 in April 2006 to 1,961 in April 2018, one thing is clear: ESG is playing an integral part in the investment decisions of investors and asset managers alike

In June of this year, the PRI (in partnership with ERM) published its ESG Monitoring, Reporting and Dialogue in Private Equity report. The report incorporates case studies from fund managers and investors, providing concrete examples of how the ESG Monitoring and Reporting Framework can be tailored and implemented.

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Cryptocurrency | UK tax issues for fund investors

Building upon our recent Insight which looks at the taxation of cryptocurrencies across Europe, in this article we drill down into the specific UK tax issues which fund investors should be aware of when investing in cryptocurrencies.

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Substance abuse | CSSF says the fund manager must be in full control

In light of the uncertainty around Brexit, a number of asset managers have outlined plans to increase their presence in, or move part of their operations to, Dublin or Luxembourg. Among the many considerations that such a move entails, managers need to be particularly mindful of the local “substance” requirements.

The Circular published on 23 August 2018 by Luxembourg’s Financial Regulator, the CSSF, brings welcome clarity to the authorisation and organisational requirements of fund managers seeking to establish themselves in Luxembourg, and indeed those already operating in the jurisdiction. It also introduces some important (and potentially onerous) new requirements that fund managers need to be aware of.

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Institutional Limited Partners Association updates | GP-led restructurings and a focus on diversity and inclusion within private equity

The ILPA has been very busy of late, with its recent publication of several resources developed to support the advancement of diversity and inclusion within the private equity industry, and plans to publish guidance on GP-led restructurings as early as the end of the year.

Fund managers should be aware of these developments from the ILPA, and be prepared to address questions arising from investors.

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What does the future hold for KIDs?

Since the Packaged Retail Investment and Insurance-based Products Regulation came into force in January 2018, various concerns have been raised in the market about the practical aspects of the obligation to produce a standardised Key Information Document, in particular the issue of costs and comparability across products.

These concerns have prompted regulators (such as the FCA), firms, and trade associations across the EU to take action.

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LGPS Code of Transparency | call for tenders

On 3 September 2018, the Local Government Pension Scheme for England and Wales Advisory Board issued a call for tenders from third-party providers to create a voluntary “Code of Transparency compliance system” for processing and validating templates received from fund managers for each of the relevant LGPS funds or Pools.

A number of private equity funds have stated an intention to follow the Code of Transparency as closely as possible until a dedicated private equity template becomes available.

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10 more things US fund managers need to know about marketing their funds in Europe

2017/2018 has been a period of considerable change for those looking for European investors, as well as the European funds industry itself. We have seen new disclosure regulations introduced, a change in the focus of investment policies and investor appetite across the asset classes, and increasing regulatory scrutiny of fund structures.

Building upon our previous Insight on this topic, we take a fresh look at 10 more things US fund managers need to know about marketing their funds in Europe.

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The Great British Break Off  | Key considerations for AIFMs preparing for a “no deal” Brexit

Nearly two-thirds of asset managers are now allocating significant time and resource to preparing for a “no deal” Brexit. And if the European Commission and the UK government agree on anything, it is the need for all firms to plan for this worst case scenario.

This article looks at the latest guidance published for asset managers (and financial services firms, generally) in relation to the UK’s departure from the European Union and the preparation for a “no deal” scenario, as well as the key issues that AIFMs should be considering in the context of their contingency planning.

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