I GENERAL OVERVIEW
Since 2009, there has been a gradual trend towards financial deleveraging of Portuguese companies, and less financing provided by Portuguese banks. The average indebtedness of Portuguese companies went from €4.121 million at the end of 2009 to €3.564 million at the end of 2015, for medium enterprises,2 and from €17.282 million at the end of 2009 to €11.955 million at the end of 2015, for large enterprises.3, 4 Furthermore, in 2012, approximately €234 billion and €79 billion was provided to Portuguese companies in the form of loans and current account facilities, respectively; and in 2015 these figures were only approximately €208 billion and €56 billion for each type of product, respectively (figures for the entire 2016 were not available at the time of writing but also indicate a downward trend, with the amounts for the first three quarters combined being approximately €155 billion for loans and €38 thousand million for current account facilities).5
In this context, private equity is an important alternative source of capital for Portuguese businesses.
ii Recent fundraising figures and trends6
Fundraising activity in Portugal decreased significantly in 2015, when compared to 2014. According to Invest Europe, a total of €35.83 million was raised in Portugal in 2015, which compares unfavourably with the €96.82 million raised in 2014. This amount comprises the lowest amount of funds raised by private equity funds in Portugal since 2007 (except in 2008, when only €15.22 million was raised).
The amount raised during 2015 is exclusively attributable to independent funds. In other words, there was no fundraising activity by captive or non-independent funds in Portugal in 2015. In comparison, the amount raised by captive or non-independent funds in 2014 was €86.7 million, amounting to 89.5 per cent of the total funds raised in that year, and the amount raised by independent funds was €10.12 million, or 10.5 per cent of the total funds raised. It is worth noting that, although the total amount of funds raised in 2015 only comprised just over a third of the funds raised in 2014, the amount raised by independent firms more than tripled from one year to the other.
As to the profile of funds that have raised amounts in 2015, statistics show that the ‘generalist’ private equity funds have been predominant, having raised €32.3 million, or 90.1 per cent of the total funds raised. The rest of the funds raised in 2015 derive almost exclusively from a single venture capital fund with a focus on early-stage investments, which accounts for €3.3 million, or 9.2 per cent, of the total funds raised. In terms of the number of players that have been active in fundraising, said sum of €32.3 million raised by ‘generalist’ funds is attributable to only two funds, while the €3.3 million also referred to was raised, as mentioned, by a single venture capital fund. With a residual amount having been raised by a fourth fund, the total number of active funds with regard to fundraising in 2015 is four, which is the same number of funds that participated in fundraising activities in 2014 (the number of funds active in fundraising having peaked in 2011, with 15 funds).
As regards incorporation or beginning of activity of new funds, according to the Portuguese Securities Market Commission’s (CMVM) website,9 a total of 17 and 10 funds were incorporated in 2015 and 2016,10 respectively.
According to the CMVM’s 2015 annual report on the Portuguese private equity sector,11 at the end of 2015, the size of the Portuguese private equity industry (defined as the sum of (1) equity holdings, (2) loans and other forms of equity or debt financing claims, (3) equity options held by funds incorporated in Portugal and (4) capital commitments from investors that are not yet paid up) was €4.5 billion. Out of this amount, 19.4 per cent (i.e., €873 million) corresponded to not yet paid-up capital commitments from fund investors.
iii Time required to raise funds
The time required to raise funds depends on several factors, particularly the complexity and length of the negotiation of the underlying documents with investors and other parties. In our experience, a fundraising process could take between six months to one year to complete. In any case, the actual duration of the process depends on the specific circumstances of the case at hand.
II LEGAL FRAMEWORK FOR FUNDRAISING
The main statutory instrument governing private equity in Portugal is Law No. 18/2015, of 4 March (the PE Legal Framework), which transposes Directive No. 2011/61/EU of the European Parliament and of the Council of 8 June on alternative investment fund managers (AIFMD) into Portuguese law. The PE Legal Framework repealed Decree-Law No. 375/2007, of 8 November, which previously governed private equity in Portugal.
The PE Legal Framework regulates, notably, the following matters: (1) what is considered a private equity investment under Portuguese law; (2) the legal forms that can be adopted by funds and fund management entities incorporated in Portugal; (3) the registration and prior authorisation requirements that funds and fund management entities must meet, (4) which operations may be carried out by private equity funds and managing entities and which operations are prohibited, (5) the minimum capital requirements that private equity funds and managing entities must meet, (6) the obligations in relation to reporting of annual accounts, (7) governance matters, (8) dissolution, liquidation, merger and demerger of unincorporated funds, (9) for funds and managing entities that exceed the thresholds set out under the AIFMD, the duties and requirements that such funds and managing entities must comply with (as indicated below), and (10) the sanctions that the CMVM can impose and the scope of its supervisory and regulatory powers.
The PE Legal Framework defines private equity investing as ‘the acquisition, for a limited period of time, of equity instruments or debt instruments in companies with a high growth potential, as a way to benefit from the improved valuation of such companies’.12
CMVM Regulation No. 3/2015 on private equity, social entrepreneurialism and alternative investment fund management (Regulation 3/2015) governs some matters foreseen in the PE Legal Framework in more detail.
ii Preferred jurisdictions for funds
Portugal is generally the jurisdiction of choice for Portuguese sponsors to incorporate funds or vehicles used by funds to conduct their investments. However, some Portuguese sponsors have used structures (especially to invest in non-performing loans) that include entities incorporated outside Portugal, particularly in Luxembourg. Foreign sponsors may use Portuguese vehicles to invest in Portugal but generally also use structures involving foreign entities, with Luxembourg, again, being a prevalent choice. In both cases, the choice of jurisdiction is usually influenced by tax structuring concerns.
iii Legal forms
The following are the main legal forms foreseen under the PE Legal Framework for Portuguese entities that aim to conduct private equity investment (as defined thereunder):
- a private equity companies (SCRs);
- b private equity unincorporated funds (FCRs);
- c private equity investors (ICRs);
- d private equity fund management companies’ (fund management companies); and
- e private equity investment companies (PE investment companies).
The PE Legal Framework draws an important distinction between (1) entities that are not allowed to exceed certain assets under management thresholds set out under the AIFMD (SCRs, FCRs managed by SCRs and ICRs), and (2) entities that are allowed to exceed them (fund management companies, FCRs managed by fund managing companies and PE investment companies). The former entities are subject to a less demanding regulatory regime under the PE Legal Framework; the latter are subject to stricter rules that were established in the PE Legal Framework so as to ensure that Portuguese law complies with the requirements of the AIFMD.
SCRs, FCRs and ICRs
As mentioned above, SCRs, FCRs – if managed by SCRs – and ICRs are subject to less demanding regulatory requirements under the PE Legal Framework. In addition, they must not exceed certain thresholds set out under the AIFMD. Specifically, SCRs, FCRs that are managed by SCRs and ICRs must not (1) exceed €100 million of assets under management, when any such assets were acquired by using leverage, or (2) exceed €500 million of assets under management, when all assets are unleveraged, and have no redemption rights exercisable against them by investors during a period of five years following the initial investment.
SCRs have legal personality and must be incorporated as private limited liability companies by shares, with a minimum share capital of €125,000, mandatorily represented by nominative shares. As SCRs adopt a corporate form, they are subject to the general rules of the Portuguese Companies Code, in all matters that are not specifically regulated under the PE Legal Framework. The main constitutional documents of an SCR are its articles of association and internal regulations. An SCR that adopts the Latin Governance Model (the most common governance structure among Portuguese companies) is governed by a board of directors and supervised by a supervisory board plus an external auditor that must be registered with the CMVM. Subject to certain limitations established by law, special classes of shares may be issued by SCRs, notably preferred shares. SCRs can engage in private equity investing directly and act as managing entities of FCRs. SCRs (and, generally, FCRs and ICRs) are forbidden from engaging in certain types of transactions, notably, investing in real estate (but they can acquire real estate to set up their offices).
FCRs are unincorporated entities that have no legal personality (although they can be a party to judicial proceedings as a claimant or defendant). An FCR is not liable for the debts of its investors; similarly, FCRs have limited liability, i.e., investors are not liable, as a general rule, for an FCR’s debts. Ownership of an interest in an FCR is represented by participation units, which are considered securities under the Portuguese Securities Code. FCRs must be managed by a managing entity, which may be, in particular, an SCR or a fund management company; decisions on structural matters, however, require the approval of a general meeting of fund participants. The main constitutional document of an FCR is its management regulations. An FCR must have a minimum subscribed capital of €1 million. The minimum capital subscription that can be made by an FCR investor is of €50,000, except for members of the managing entity’s management board (who can subscribe lower amounts). Different classes of participation units may be created, bestowing different rights upon their respective holders, provided that the existing classes of participation units are foreseen in the managing regulations and are ‘consistent with the risk profile and investment policies’ of the FCR.13
ICRs have legal personality and must be incorporated as sole shareholder private limited liability companies by quotas. The sole shareholder of ICRs must be a natural person.
Fund management companies, FCRs managed by fund management and PE investment companies
As mentioned above, fund management companies, FCRs managed by fund management companies and PE investment companies may exceed the assets under management thresholds foreseen under the AIFMD. However, they are also subject to stricter regulatory requirements pursuant to the PE Legal Framework (which seeks, in this regard, to implement the requirements of the AIFMD).
Fund management companies must be incorporated as private limited liability companies by shares with a minimum share capital of €125,000, mandatorily represented by nominative shares. Their main corporate purpose is the management of FCRs or of PE investment companies. They are also allowed, particularly, to act as managing entities of ‘undertakings for specialised alternative investment’.
PE investment companies must likewise be incorporated as private limited liability companies by shares. These entities may be internally managed or externally managed (particularly by fund management companies). If they are internally managed, they must have a minimum share capital of €300,000, also mandatorily represented by nominative shares. Their purpose is to make private equity investments (as defined in the PE Legal Framework).
The PE Legal Framework regulates the following matters in relation to fund management companies and PE investment companies:
- a authorisation requirements;
- b suitability of members of corporate bodies with management roles and of shareholders holding equity stakes above specific thresholds;
- c remuneration policies;
- d prevention of conflicts of interest;
- e risk management;
- f internal organisation requirements;
- g delegation of functions;
- h liquidity management;
- i asset valuation; and
- j reporting requirements, among others.
Fund management companies and PE investment companies are authorised to exercise their activities (including marketing funds) in other European Union Member States, subject to the rules set out under the AIFMD, as transposed into the domestic law of each Member State.
Preferred legal forms
As per the information available on the CMVM’s website,14 FCRs are by far the predominant legal form out of the legal forms foreseen under the PE Legal Framework. A total of 87 FCRs are registered with the CMVM, compared to 43 SCRs and one fund management company.
iv Key negotiable terms
Fundraising transactions usually entail the negotiation between sponsors and fund investors of the constitutional documents of the fund (management regulations in the case of FCRs or articles of association and internal regulations in the case of SCRs), as well as of ancillary documents (which vary on a case-by-case basis, e.g., investment agreements, side letters).
Terms that are usually carefully negotiated between sponsors and investors include:
- a fund indebtedness limitations;
- b investment policies;
- c distribution policies;
- d rules regarding the removal of the managing entity (in the case of funds that are externally managed);
- e investor rights, including economic, voting and information rights;
- f the duration of the fund until liquidation;
- g the duration and amount of capital commitments and procedure for making cash calls;
- h sponsor remuneration (which usually includes management fees charged as a percentage of committed capital as well as carried interest provisions);
- i the functioning of general shareholders’ meetings or fund participants’ meetings (including number of ordinary meetings required per year, procedures for summoning meetings, quorum requirements, etc.);
- j limitations regarding transfer of interests in the fund;
- k ‘key person’ provisions (which may include the suspension of all investment or divestment activities in the absence of a designated ‘key person’, cuts to the remuneration due to the managing entity and the option for investors to decide on the liquidation of the fund); and
- l the existence of ad hoc bodies, such as investment committees, as well as the composition, the powers, and the functioning of the same (in relation to the latter, it is understood that, in funds that are externally managed, committees comprised by investors may only have a consulting role, namely, they are not allowed to take binding decisions on investments or divestments, as such would collide with the functions bestowed by law upon the managing entity. Furthermore, there has been precedent of the CMVM arguing that provisions that determine that investors are eligible to sit on ad hoc committees exclusively on the basis of the amount of their commitment are not valid, as this arrangement can be deemed a breach of the generic principle set out in the PE Legal Framework pursuant to which managing entities must treat fund investors in equal terms).
v Key disclosure items15
Pursuant to Regulation 3/2015 on private equity, social entrepreneurialism and alternative investment fund management, which seeks to govern some matters foreseen in the PE Legal Framework in more detail, SCRs and fund management companies are required to provide in a clear way and prior to an investment decision the following information to potential investors to which they are marketing interest in a fund: (1) the identity of the managing entity and of any service providers hired by the managing entity to render services relating to the fund management; (2) the amount of funds available to the managing entity, and an explanation of why the managing entity deems such amount to be adequate to pay for the technical and human resources required to manage the fund appropriately; (3) a description of the investment strategy and objectives of the fund, indicating, notably, which characteristics must be met by eligible investment targets, which investment techniques the fund intends to implement and which investment restrictions apply; (4) a description of the fund’s risk profile and details of the risks inherent to the asset classes in which the fund intends to invest or inherent to the investment techniques to be used by the fund; (5) description of the valuation methodologies to be used by the fund when evaluating its assets; (6) a description of how the managing entity’s remuneration is to be calculated; (7) a description of all relevant costs to be incurred by the fund and the maximum amount of such costs, (8) historical data on the fund financial performance, (9) a description of the company support services and other support activities that may be rendered by the managing entity, directly or through third parties, with the purpose of facilitating the development or growth or any other aspects relating to the companies in which the fund is to invest, or, if no such services are rendered, an explanation on why that is the case; and (10) a description of the procedures that may be followed to change the fund’s investment policy or investment strategy, or both.
The managing regulations of FCRs, to which investors are deemed to adhere when acquiring or subscribing participation units must include the following information, among others: duration of the fund and conditions for a possible extension; capital amount; terms under which the fund can increase and reduce capital; description of the rights inherent to different classes of participation units; capital subscription and payment rules; investment policies; indebtedness limitations; distribution policies; asset valuation criteria; frequency with which information on the funds’ assets and the value of each participation unit is communicated to investors; information on remuneration payable to the managing entity; and terms and conditions applying to fund liquidation.
Similarly, disclosure requirements apply to the marketing of funds that are managed by entities that exceed the thresholds set out in the AIFMD.
Finally, it should be noted that, whenever the marketing of a fund involves a public offer, a prospectus must be prepared, with the minimum information requirements set out under Portuguese and European law, notably the Portuguese Securities Code and Regulation (EC) 809/2004 of 29 April.
vi Solicitation of investors
Solicitation by private offering is the predominant method of marketing private equity funds in Portugal and, to the best of the authors’ knowledge, no solicitation of investors by public offer has taken place in Portugal recently.
The incorporation of FCRs16 and the commencement of activity by ICRs that have not been marketed to the public and have only been marketed to ‘qualified investors’ (as defined under Portuguese law) or, alternatively, in which the minimum subscribed capital of each individual investor is at least €500,000 (whether or not investors are ‘qualified investors’), is subject only to a prior communication addressed to the CMVM, as opposed to requiring prior registration with the CMVM or prior authorisation by the CMVM. As such, sponsors may have an incentive to market funds allowing only minimum capital commitments of at least this amount, so as to benefit from this rule.
As mentioned above, the solicitation of investment from the public, if considered a public offer under the Portuguese Securities Code, requires the preparation of a prospectus as well as compliance with rules applying to public offers generally and public distribution offers particularly under Portuguese and European law. Pursuant to the Portuguese Securities Code, and as a general principle, an offering is considered as a public offer whenever it is addressed in whole or in part to undetermined recipients. Offers that are preceded or accompanied by prospection and collection of investment commitments, or preceded or accompanied by advertising under any form, as well as offers that are addressed to at least 150 ‘non-qualified’ investors domiciled in Portugal are also considered public offers. Offers addressed exclusively to ‘qualified investors’ are always deemed private offers.
vii Fiduciary duties of sponsors
Pursuant to the PE Legal Framework, as a general rule, entities that manage FCRs are required to exercise their activities in an independent way and in the exclusive interest of the investors, with a view to protecting their legitimate interests and ensuring fair and equal treatment for all of them. Managing entities must also refrain from participating in any dealings that may entail a conflict of interest with investors of funds managed by them. Furthermore, managing entities must have an organisational structure and internal procedures that are adequate, in proportion, to their dimension and the complexity of the activities carried out by them.
In addition, fund management companies and PE investment companies, have, among others, the following specific duties to: (1) defend not only the best interest of investors but also market integrity in general; (2) have the resources and processes required for the exercise of their activities, and use them in an efficient way; (3) take all reasonable measures to prevent conflicts of interest and, whenever such conflicts cannot be avoided, to identify, manage and follow-up on such conflicts and, if required, to communicate such conflicts of interest so as to avoid them having an adverse effect on the interests of the funds and their investors, as well as to ensure that the funds managed by them are treated on fair terms; (4) treat all fund investors fairly; (5) have a functional and hierarchical separation between risk management functions and operational functions; and (6) implement adequate liquidity management systems so as to have control over the liquidity risk of the funds managed by them.
III REGULATORY DEVELOPMENTS
i Regulatory oversight
The CMVM is the national authority appointed under the PE Legal Framework with supervisory responsibilities in relation to matters such as the incorporation and authorisation of private equity funds and managing entities in Portugal as well as the marketing of funds and, generally, fundraising for private equity funds in Portugal.
The CMVM is endowed with a broad range of prerogatives to enable it to conduct its supervisory role (including investigation powers). Such prerogatives are listed in the Portuguese Securities Code, with specificities being included in the PE Legal Framework.
The PE Legal Framework specifically endows CMVM with the power to issue regulations on a number of matters pertaining to the activity of private equity funds and managing entities, in particular, the evaluation of assets and liabilities, information duties, authorisation and registration procedures, suitability requirements applicable to corporate body members and qualified shareholders, among others. Regulation 3/2015 governs some of these matters.
Pursuant to the PE Legal Framework, in exercising its supervisory role, CMVM shall take into consideration any guidance issued by the European Securities and Markets Authority.17
Some suitability requirements may apply to investors that hold interests in specific types of funds or managing entities in excess of certain thresholds, as per the PE Legal Framework.
ii Fund or sponsor registration
Private equity funds and managing entities incorporated in Portugal are in principle subject to either ‘registration’ with the CMVM or ‘prior authorisation’ by the CMVM. The registration requirements are less strict than those applicable to obtaining prior authorisation from the CMVM.
Registration applies to entities that do not exceed the thresholds set out under the AIFMD (i.e., SCRs, FCRs managed by SCRs and ICRs). However, and as mentioned above, registration can be replaced by a prior communication addressed to the CMVM in the case of FCRs that have only been marketed to ‘qualified investors’ or in which the minimum subscribed capital of each individual investor is at least €500,000.
Prior authorisation applies to entities that are allowed to exceed the thresholds set out under the AIFMD (i.e., fund management companies, FCRs managed by fund management companies, and PE investment companies).
The worldwide income derived by FCRs set up and operating under Portuguese law is exempt from corporate income tax (CIT) in Portugal. As a result of the full CIT exemption, FCRs generally are not able to benefit from tax credits arising from foreign taxes charged on income derived abroad.
Income paid or made available by FCRs to Portuguese-resident corporate unitholders through the distribution of profits, redemption of units, or liquidation of the fund, is subject to a flat 10 per cent withholding tax with the nature of a payment on account of the final tax due. Capital gains obtained by Portuguese-resident corporate unitholders with the disposal of units is subject to CIT at the standard rate of 21 per cent, possibly added to a state surcharge, levied on taxable profits in excess of €1.5 million at a rate of up to 7 per cent, and a municipal surcharge also levied on taxable profits at rates of up to 1.5 per cent (depending on the municipality).
If the income is paid or made available to Portuguese-resident individuals, the flat 10 per cent rate also applies and the withholding is final, unless the individual elects to aggregate the income with the remaining income subject to personal income tax (PIT), in which case the general progressive PIT rates apply. In this case, the withholding tax paid has the nature of a payment on account of the final tax due and, provided that certain conditions are complied with, the individual will be entitled to deduct for PIT purposes 50 per cent of the income paid by the FCR corresponding to dividends distributed by the FCR. Capital gains obtained by resident individuals are subject to a special PIT rate of 10 per cent.
Income and capital gains derived by non-resident unitholders (either companies or individuals) are exempt from tax in Portugal, unless the investor is resident in a listed tax haven or, in case of companies, if the corporate unitholder is held in at least 25 per cent by a Portuguese-resident entity, in which case the 10 per cent rate applies.
SCRs are subject to the general Portuguese CIT regime. The worldwide income derived by SCRs is subject to CIT at the standard rate of 21 per cent, possibly added to a state surcharge, levied on taxable profits in excess of €1.5 million at a rate of up to 7 per cent, and a municipal surcharge also levied on taxable profits at rates of up to 1.5 per cent (depending on the municipality). However, SCRs are entitled to deduct from the CIT due the amount of the investments made in companies with growth and capitalisation potential. The deduction may be taken in the tax year in which the relevant investment is made or in the following five tax years, and is limited to the sum of the CIT due in the five tax years prior to the one in which the relevant investment is made. Moreover, dividends and capital gains obtained by SCRs may be exempt from CIT under the Portuguese participation exemption regime, provided certain conditions are met.
Income paid or made available by SCRs to Portuguese-resident companies should be subject to withholding tax at a 25 per cent rate with the nature of a payment on account of the final tax due, or exempt from withholding tax if the participation exemption regime applies. Capital gains derived by Portuguese-resident companies with the disposal of shares in SCRs may be exempt from CIT provided that the participation exemption regime applies.
If the income is paid or made available to Portuguese-resident individuals, a 28 per cent final withholding tax should apply, unless the individual elects to aggregate the income with the remaining income subject to PIT, in which case the general progressive PIT rates apply. In this case, the withholding tax paid has the nature of a payment on account of the final tax due and, provided that certain conditions are complied with, the individual will be entitled to deduct for PIT purposes 50 per cent of the income paid by the SCR corresponding to dividends distributed by the SCR. Capital gains derived by Portuguese-resident individuals with the disposal of shares in SCRs are subject to PIT at a special 28 per cent rate, and the individual may also opt to aggregate the gains with the remaining income subject to the general progressive PIT rates.
Income derived by non-resident companies should, as a general rule, be subject to withholding tax at a 25 per cent rate. However, a reduced withholding tax rate may apply under a double tax treaty entered into by Portugal, or the income may be exempt from withholding tax under the Portuguese outbound participation exemption regime.
Income derived by non-resident individuals should be subject to withholding tax at a 28 per cent rate or to a reduced withholding tax rate under an applicable double tax treaty.
Capital gains derived by non-resident companies or individuals are, as a general rule, exempt from tax in Portugal under a domestic exemption or an applicable double tax treaty.
iv Key changes to the regulatory and tax regime
There were no major changes to the Portuguese regulatory and tax regime applicable to private equity last year. The latest major pieces of legislation enacted were the PE Legal Framework, which was enacted in 2015, and which, as mentioned above, implements the AIFMD in Portugal, and Regulation 3/2015 on private equity, social entrepreneurialism and alternative investment fund management, which seeks to govern some matters foreseen in the PE Legal Framework in more detail.
No major legislative or regulatory changes concerning the private equity sector are expected in the near future in Portugal.
Buyouts, investments in mature companies or investment in non-performing loans have all historically predominated over venture capital, seed capital and, generally, investment in companies in earlier stages of development in Portugal. However, Lisbon is gaining increased international visibility as having a thriving start-up scene, as is exemplified by the city hosting the 2016 edition and in all probability the 2017 edition of the Web Summit.18
Although it remains to be seen if a start-up scene actually develops and manages to gain momentum in Lisbon, the venture capital industry could face parallel growth.
1 Francisco Brito e Abreu and Marta Pontes are partners, Joana Torres Ereio is a senior associate, José Maria Rodrigues is an associate and Gerard Everaert is an associate at Uría Menéndez – Proença de Carvalho.
2 As defined in the European Commission Recommendation no. 2003/361/EC of 6 May 2003.
3 Statistical bulletin of February 2017 prepared by the Portuguese central Bank (available at www.bportugal.pt/publications/banco-de-portugal).
4 As defined in the European Commission Recommendation no. 2003/361/EC of 6 May 2003.
5 Same source indicated in footnote 2.
6 All statistics in this sub-section were obtained from www.investeurope.eu/research/activity-data/annual-activity-statistics.
7 Particularly, www.investeurope.eu/research/activity-data/annual-activity-statistics.
10 ‘Funds’ in this case referring to any type of private equity investor that is incorporated in Portugal, regardless of the specific legal entity form that is adopted.
11 See footnote 7.
12 Article 3 of the PE Legal Framework.
13 Article 23 of the PE Legal Framework.
15 This section only considers disclosure obligations in the context of fundraising and not ongoing disclosure or reporting obligations of funds or their managing entities.
16 Other than FCRs that are managed by fund management companies, which are subject to the tighter regulatory framework applying to entities that exceed the AIFMD thresholds.