Part 3 – Overview of the limited partnership fund: Safe harbors for limited partners

• Hong Kong

• Investment funds and asset management
• Financial services

24-08-2020

For the majority of limited partners (“LPs”), the issue of utilizing or benefitting from a safe harbor is not one that ordinarily troubles them. They are, after all, entrusting the fund manager with their money precisely because they believe they have the skillset to deliver good risk-adjusted returns and make all required decisions to achieve that. The vast majority of LPs have accordingly no interest in involving themselves with the activities of the fund, unless it is imperative to protecting their investments.

However, if we have learned nothing else from the COVID-19 pandemic, it is to expect the unexpected. It is precisely because the unexpected can happen and more often it would now appear regularly does, that having a well-defined list of safe harbors which allows LPs to safely engage in making certain decisions as regards the fund and at the same time protect LPs’ limited liability status is of crucial importance to any private equity fund regime seeking to be the best in class (which Hong Kong is certainly aiming for).

In this client update, we compare the safe harbors, broadly categorised based on the nature of activities involved, offered by the Hong Kong LPF, the Cayman Islands exempted limited partnership, and the Singapore limited partnership structures, to review the management flexibility offered by each regime. Read full client update here.

For more information on Part 1, please click here.

For more information on Part 2, please click here.