As the world emerges from the COVID-19 pandemic, every industry must take stock and evaluate the changes that are here to stay and the adaptations required to suit the new environment. This article examines the developments in and resilience of Guernsey's funds industry. Notably, it is clear that the government continues to support the funds industry and recognises the importance that private equity and sustainable finance play in the longevity of Guernsey as a financial centre.
In addition to a substantial increase in funding and staff dedicated to monitoring and enforcement, the Department of the Treasury, which leads the Committee on Foreign Investment in the United States (CFIUS) review process, has now developed a webpage encouraging members of the public to provide it with tips and referrals with respect to non-notified deals, violations of CFIUS mitigation measures and certain other matters that raise national security risk.
In light of the disruption caused by the COVID-19 pandemic, India has adopted a similar approach to the United States and Europe and restricted foreign direct investment from certain jurisdictions. By way of a notification issued by the Department of Economic Affairs, the government has introduced measures to curb opportunistic takeovers (direct or indirect) of Indian companies by persons or entities of any country which shares a land border with India.
In a news cycle that can seem relentlessly gloomy, there are some positive stories to be told and the increased activity in private equity is one of them. This article looks beyond the financial services industry at the wider social and economic benefits of this growth. For instance, private equity is becoming increasingly active in the medical and healthcare sector, which, in turn, has led to a large number of private equity investments in areas such as technology, software and data.
Cross-border private M&A transactions will often involve a seller tax resident in one jurisdiction and a target company tax resident in another. This article focuses on practical considerations for parties that encounter the risk of an 'offshore indirect transfer' charge in a private M&A transaction and need to manage it in the diligence process and transaction documentation. Managing this risk appropriately can be deal critical.
The Court of Appeal recently reiterated the importance of following the natural and ordinary meaning of a fund's articles in order to ensure that redemptions are effective. This is particularly important in the context of a master-feeder fund structure. Although the decision is consistent with longstanding authority, it does highlight the importance of ensuring that the redemption procedures set out in a master fund's articles are strictly adhered to as a matter of practice.
It is said that even though some parts of the private equity industry are in need of triage, it can survive the implications of COVID-19 because it has sufficient capital already raised but not deployed – its 'dry powder'. Funds' ongoing investment in their portfolio companies is what generates long-term returns on exit. However, that use of dry powder is not always about the growth of a company – sometimes it is about keeping the company going during tough times.
In times like these, parties should consider the key parameters of a contemplated transaction even more carefully. In addition to factors such as pricing, process timelines and contractual undertakings, parties must properly consider the COVID-19 pandemic's potential economic effects on targets when structuring a deal. This article outlines the differences between the two main purchase price mechanisms that can help to alleviate such economic effects and the pros and cons of each.
Guernsey entities continue to be popular in asset-holding structures and, accordingly, lenders are regularly asked to put in place financing arrangements involving Guernsey entities. This article provides an overview of the mechanism under Guernsey law for the creation and enforcement of security over certain Guernsey-situated assets, such as the shares in a Guernsey company, certain contract rights and monies in a Guernsey bank account.
This article provides a practical comparison between two of Guernsey's most flexible regulated fund products: the registered collective investment scheme (registered schemes) and the private investment fund (PIFs). Both registered schemes and PIFs are used across all fund types and asset bases – from private equity funds investing in sustainable energy to hedge funds investing in smart technology.
The Guernsey Financial Services Commission recently announced the launch of a new fast-track application regime for managers of overseas collective investment schemes. The intention is to make the process as simple as possible for such managers looking to apply for a Guernsey licence. The regime is available for managers migrating to Guernsey, as well as managers looking to establish a new Guernsey entity.
Closing is the ultimate stage in an M&A transaction where all parties meet to seal – and celebrate – their agreement; however, it can be a traumatic process due to the time spent in meeting rooms signing and initialising contracts. Lawyers and clients have long hoped for change in this regard. During the COVID-19 lockdown, signs of a change emerged in the form of electronic signatures, as contracts could not be signed in person and scheduled closings were either dematerialised or delayed.
The government recently announced amendments to the merger control regime which extend its discretionary powers to intervene on national security or public interest grounds. These reforms aim to address concerns raised by the COVID-19 pandemic and related financial uncertainty which has heightened the "risk of hostile actors exploiting the situation" to acquire vulnerable UK businesses.
Amendments to the Foreign Exchange and Foreign Trade Act, which regulates foreign direct investment (FDI) in Japan, as well as its related cabinet orders, ministerial ordinances and public notifications, came into force and was fully implemented as of 7 June 2020. The amendments are a continuation of recent changes that have been made to Japan's FDI regulations. This article provides an overview of the amendments with a particular focus on topics relating to businesses in the technology field.
In a decision that provides additional certainty to dissenting shareholders, the Grand Court has rejected a company's efforts to recast the procedural framework for appraisal proceedings brought under Section 238 of the Companies Law (as revised). This decision follows the significant 2019 ruling of Chief Justice Smellie in JA Solar, which has become the touchstone for directions orders in Section 238 proceedings.
In the context of the worldwide economic crisis caused by the COVID-19 pandemic, the EU authorities issued guidelines to reinforce the protection of strategic sectors and vulnerable companies from foreign investment. However, the measures taken by France are not as far reaching as in other EU countries, as the French authorities chose to extend the measures to biotechnologies and take precautionary temporary measures with respect to listed companies.
The Takeover Board recently confirmed its case law on whether the obligation to make a public takeover offer may be fulfilled by completing a merger. However, the Takeover Board's arguments were based heavily on the specifics of the case at hand. It seems possible, if not likely, that the Takeover Board would have come to a different conclusion had the merger been structured differently.
The impact of COVID-19 is being felt in almost every work area across the globe. In order to keep readers abreast of this evolving situation, ILO's COVID-19 Weekly Report provides insight into the major legal developments of the past seven days, as well as a round-up of our panel of experienced international legal commentators' legislative and regulatory guidance.
Following the widespread outbreak of COVID-19 in Switzerland, the Federal Council implemented several emergency measures to mitigate the virus's economic impact. After weeks of pressure from the growing Swiss start-up ecosystem, the Federal Council acknowledged that start-ups had little or no access to the existing emergency aid and, considering their importance for the economy as a whole, stated that it would devise a liquidity support programme specifically designed for innovative start-ups.
From the outset of a deal, the parties will be keen to understand whether regulatory approval is required or recommended to be obtained prior to closing, how long it will take to obtain approval and the ability of the relevant regulator to block the transaction or otherwise impose conditions to closing that may change the commercial terms of the deal (as well as the likelihood of the same). This article looks at the regime under the Enterprise Act 2002 for government control over investment in the United Kingdom.