Example 2 – private equity spin-out hosting

One of the biggest private equity spin-outs of 2017 required an immediate regulatory hosting solution

Situation

The private equity arm of one of the largest global fund management groups was spinning out of its ultimate parent company via a management buyout and needed to start conducting regulated activities immediately after spinning-out whilst awaiting FCA authorisation.

Client goals

An interim solution which would enable operation during the lengthy approval process of six to 10 months and provide speed of execution and a smooth business transition.

Barriers to success

Such a delicate transaction as a management buyout involves significant investor dialogue, and, entrusting the regulatory status of the UK entity to a third party can often be a challenging proposition for institutional investors to comprehend.

Solutions provided

Lawson Conner provided the regulatory infrastructure so the client can start marketing the fund under AIFMD. Lawson Conner completed all regulatory filings and notifications and made sure the firm was compliant right from the start to meet operational due diligence requirements. The client has received its direct authorisation and Lawson Conner provides managed compliance services and software.

Results

The management buyout and the launch of the client’s own fund was executed in a record time without any material business disruption. All investors were satisfied to provide additional capital to the fund.