Clawback risks in LP Secondaries
A basic principle in LP secondaries transactions is that the buyer steps into the shoes of the seller and assumes the economic risks and benefits associated with the transferred interest. There are, however, important exceptions from that principle, most prominently the excluded obligations.
The secondary market for private equity stakes is poised for an unprecedented $150 billion in sales in 2024, a 25% increase from last year.
Buyer’s Guide to Withholding Tax in LP Secondaries
In many LP secondary transactions, withholding tax is a key consideration for both the seller and the buyer. Neither party typically wants withholding to apply, but determining this requires collaboration between the parties and coordination with the fund and its manager to assess whether withholding should apply to the purchase price. This article summarizes the key aspects of tax withholding that are essential for buyers to understand.
You know the feeling. You finally got the Purchase and Sale Agreement (PSA) signed and the secondary LP deal is practically done. You’re already onto the next one, but there are still a number of items left to sort before closing - transfer documents, KYC, investor questionnaires, etc.
Legal Terms and Conditions
The specific terms and conditions for our services vary by engagement and will be provided with our engagement letter. If you wish to review these terms before instructing us, please contact your point of contact at the firm. All our contracts are governed by the laws of England and Wales.
Professional Liability Insurance
Our professional indemnity insurance complies with the legal regulatory requirements in England & Wales. Our lead insurer is Alchemy Underwriting Limited on behalf of Bridgehaven Insurance.
