2020 is likely to see an update to the legal framework for an ILP in Ireland.
Successive governments in Ireland have pursued a legislative ambition to revamp the law underpinning the investment limited partnership (ILP), which is the legal structure most suitable to house a regulated private equity investment fund in Ireland that is marketed to international investors.
In October 2019, we published an introduction to an ILP in Ireland, which is formed under the Investment Limited Partnerships Act 1994 (ILPA 1994), and regulated by the Central Bank of Ireland (CBI) as an alternative investment fund (AIF). This introduction included an outline of the proposed reform of the ILPA 1994 contained in the Investment Limited Partnerships (Amendment) Bill 2019 (2019 Bill).
The 2019 Bill was published in June 2019 by the last government, but it lapsed after a general election was called in Ireland in January 2020, with a new government being formed in June 2020.
On 17 September 2020, a new bill, the Investment Limited Partnerships (Amendment) Bill 2020 (2020 Bill) was published by the current government of Ireland in order to advance and fulfil its commitment to the revamp of the ILP.
The 2020 Bill retains the main provisions first unveiled in the 2019 Bill, along with a notable new provision requiring a general partner of an ILP to maintain a register of the beneficial ownership of the ILP and to submit that information to the CBI for inclusion on its central register of beneficial ownership. This new provision is also intended to apply to the management company of a common contractual fund and currently applies to all other legal structures that house regulated investment funds in Ireland.
The 2020 Bill must progress through both Houses of the Oireachtas (the Parliament of Ireland) before it becomes law.
In tandem with this legislative initiative, the CBI is also considering issuing guidance on the operation of the ILP as a regulated private equity AIF in Ireland. In addition, the CBI has recently introduced a new regime whereby an entity may be authorised as a ‘real asset depositary’ that can provide services to an AIF which is closed-ended for 5 years from the date of initial investment and which, pursuant to its defined investment policy, generally invests in illiquid assets. Both of these regulatory developments should provide meaningful support to the increased use of the revamped ILP by asset managers.
We will continue to monitor and update you on the legislative progress of the 2020 Bill and related regulatory developments at the CBI.
For more information please contact David Naughton at firstname.lastname@example.org.
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