PaRR Quotes Akin Lawyers on EU Foreign Subsidies Regulation’s Impact on Private Equity
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Akin co-head of antitrust & international competition Davina Garrod and antitrust & international competition counsel Marianna Meriani were quoted in PaRR’s article “EU FSR could impact PE fundraising with potential rise in ‘clean funds’ – analysis.”
The article looks at the new Foreign Subsidies Regulation (FSR) in the European Union (EU) and the impact this may have on redefining the private equity (PE) landscape as firms look to adopt “clean funds” strategies as a potential avenue for sponsors.
Stringent reporting obligations mean that PE firms may intentionally exclude foreign limited partners (LPs) to mitigate compliance complexities and regulatory risks associated with the FSR. The article examines what this might mean in terms of waivers, confidentiality, attribution and fundraising.
Marianna commented that there are limited exceptions under the FSR implementing regulation (IR) for not providing information on foreign financial contributions granted to funds of a PE group or to their portfolio companies, managed by the same investment company, but different from the investment fund involved in the notified transaction. The general partner [GP] will need to demonstrate that various requirements are met, including that there are no links between these funds, or that such relations are very limited.
Davina added, “Although there is a waiver process, GPs and LPs still need to set up a system now to collect the necessary information. They cannot rely on an untested waiver process, it’s a new regulation and it'll be frustrating, but once you have a system up and running it will become easier.”
To find out more about the impacts of the FSR, read Davina and Marianna’s blog here.
The full PaRR article is available to subscribers here.
