Reform of Ireland's investment limited partnership laws moves to next stage

Out-Law News | 26 Sep 2019 | 10:02 am | 1 min. read

The Irish parliament has passed the second stage of reforms to the country’s investment limited partnership legislation, setting the stage for changes which will modernise the Irish funds industry.

The Dáil Éireann debated the second stage of the Investment Limited Partnership (Amendment) Bill 2019 (36 page / 513KB) last week, referring the bill to a select committee.

The bill is designed to modernise the Investment Limited Partnership Act, which was first introduced in 1994, and align it with more recent domestic and EU legislation, such as the Companies Act 2014 and the EU Alternative Investment Funds Managers Directive.

Key changes include a proposal to enable a limited partnership to use an ‘umbrella’ structure, whereby the fund is divided into segregated sub-funds; allowing a partnership agreement to be amended by a majority vote rather than by unanimous consent; and extending the activities which a limited partner can undertake without losing limited liability status.

The legislation is on the Irish government’s priority legislation list and is aimed at making Ireland a more attractive domicile for private equity funds. It also forms part of the Ireland for Finance Strategy, which was launched in April and seeks to increase the number of people employed in the financial services sector and make it more innovative and sustainable.

Michael D’Arcy, minister of state for the Irish Department of Finance, said: “The Investment Limited Partnership (Amendment) Bill will further support Ireland’s offering as a top-tier global location of choice for financial services investments as laid out in the Ireland for Finance Strategy.

The limited partnership structure is used in the EU and around the world for venture capital, private equity and other ‘real economy’ investing by investment funds.

The Investment Limited Partnership (Amendment) Bill will allow Ireland to compete for global private equity investment, with the aim of creating employment and securing Ireland’s reputation as a reputable and attractive location for the funds industry, which is subject to a robust and transparent regulatory regime,” D’Arcy said.