Event recap: The Irish ILP and what it means for US GPs
The new Irish Limited Partnership (ILP) regime was the key topic of discussion at Mainstream’s webinar for US based general partners (GPs) last week.
Mainstream’s US CEO, Jay Maher, opened the event by summarising the current state of play for raising capital in the European Union.
This was followed by a panel discussion featuring Aongus McCarthy (Legal Director, DLA Piper – Ireland), Orla Philippon (Director, Ballybunion – Ireland) and Brian O’Sullivan (Partner, Grant Thornton – US) and moderated by John Collins (Business Development Manager, Mainstream Fund Services – Ireland).
Panel discussion featuring John Collins, Aongus McCarthy, Orla Philippon and Brian O’Sullivan.
The panel discussed the evolution of the Irish ILP regime, including recent legislative and Central Bank rule changes, that have led to the ILP structure emerging as an exciting new investment vehicle available to professional investors in the EU and EEA.
The ILP regime is an exciting development that brings Ireland in line with comparable partnership structures in other jurisdictions such as Luxembourg.
Similar to Delaware or Cayman structures, the Irish ILP is a modern and flexible common law partnership with no separate legal personality. It is regulated by the Central Bank of Ireland as an alternative investment fund (AIF) under the Alternative Investment Fund Managers Directive (AIFMD).
The GP is responsible for the management of the ILP and has unlimited liability for the debts and obligations of the ILP. An limited partner (LP) is not liable for the debts and obligations of the ILP.
There is flexibility for the ILP to be set up as a standalone or umbrella fund with segregated liability between sub-funds. The GP may be Irish or non-Irish but every ILP must appoint a depositary, administrator and external AIFM (if the GP is not acting as the AIFM). The ILP is also required to have a local auditor and legal advisers.
As an income and tax transparent vehicle, the ILP structure is relatively straight forward from an accounting and tax perspective. There is flexibility for multiple drawdowns and closings and distributions are generally free of Irish tax on income at the fund level.
With good planning and support, an ILP can typically be established with a lead time of 6 to 10 weeks. Several ILPs have already been authorised, with LPs taking advantage of the 24 hour fast track application process to get their structure to market quickly.
For a GP considering launching an Irish LP, key considerations are:
- How will the ILP be structured, as a standalone of umbrella fund offering?
- What are the tax and accounting considerations?
- What service providers will be appointed to support the ILP?
With similar features to Luxembourg, Cayman and Delaware LP structures, the Irish ILP will feel familiar to both GPs and LPs while offering easy access to Ireland’s well developed and well regarded alternative ecosystem.
Missed the webinar?
You can access the webinar recording here:
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This article is not intended to be financial advice and is of a general nature only that does not take into account your individual objectives, financial situation or needs. While all efforts have been made to ensure the information contained in this article is accurate, errors may occur.