Private Equity

Overview

Hong Kong is a major hub for the raising and deployment of private equity capital. It is a well established base from which to make pre-IPO investments into Mainland China as well as outbound investments into emerging markets around South-east Asia. Private equity sponsors from around the world raise capital in Hong Kong, tapping deep pools of capital from high net worth individuals and family offices. At the same time, with its connectivity to Mainland China and its proximity to other parts of Asia, private equity sponsors regard Hong Kong as a preferred base for portfolio activities focused on Greater China and the greater Asian region.

We represent clients on the full range of their activities, whether relating to the formation of new funds, the founding of sponsor groups, the establishment of investment operations in Hong Kong, the raising of capital, the deployment of capital, the ongoing management of portfolio positions and exits. We have in-depth knowledge of corporate, commercial, tax and securities law issues common to private equity.

Experience

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  • Counsel to a Northern American based private equity fund sponsor managing over USD12 billion in private equity, private credit and infrastructure investments on a capital raising exercise in Hong Kong

  • Counsel to a Hong Kong based private equity firm that focuses on investments in Chinese technology companies and their overseas acquisition, set up with USD500 million of initial funding on the restructuring of the capital of the client sponsor firm

  • Counsel to a Pre-IPO private equity fund portfolio company operating within the luxury-automotive industry in the People’s Republic of China with annual revenues exceeding USD700 million on the restructuring of its capital base, including a restructuring of the holding of its equity base to facilitate bank financing and a roll-over of its convertible note programme and on compliance of the restructuring with the terms of the private equity fund documentation

  • Lead counsel to a private equity fund manager spun off from a global pension manager with over USD400 billion under management in relation to its HKD450 million acquisition of a company which owns a substantial piece of Hong Kong real estate

  • Co-counsel to a private funds manager in relation to its acquisition of the private equity real estate firm with USD300 million of assets under management

  • Counsel to an Asian based multi-strategy private funds manager in relation to Hong Kong taxes in connection with the offering of a private equity fund

  • Counsel to a Northern American based private equity fund sponsor managing over USD12 billion in private equity, private credit and infrastructure investments on a capital raising exercise in Hong Kong

  • Counsel to a Hong Kong based private equity firm that focuses on investments in Chinese technology companies and their overseas acquisition, set up with USD500 million of initial funding on the restructuring of the capital of the client sponsor firm

  • Counsel to a Pre-IPO private equity fund portfolio company operating within the luxury-automotive industry in the People’s Republic of China with annual revenues exceeding USD700 million on the restructuring of its capital base, including a restructuring of the holding of its equity base to facilitate bank financing and a roll-over of its convertible note programme and on compliance of the restructuring with the terms of the private equity fund documentation

  • Lead counsel to a private equity fund manager spun off from a global pension manager with over USD400 billion under management in relation to its HKD450 million acquisition of a company which owns a substantial piece of Hong Kong real estate

  • Co-counsel to a private funds manager in relation to its acquisition of the private equity real estate firm with USD300 million of assets under management

  • Counsel to an Asian based multi-strategy private funds manager in relation to Hong Kong taxes in connection with the offering of a private equity fund

Awards

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  • IFLR 1000

    Leading Practice

    Private Equity

  • IFLR 1000

    "Positively Ranked"

    Private Equity

  • AsiaLaw Profiles

    Leading Practice

    Private Equity

  • Who's Who Legal

    One of the World's Leading Practitioners

    Private Funds

  • Corporate INTL Magazine

    Regulatory Law Firm of the Year in Hong Kong

    Financial Services Regulatory

  • Chambers & Partners

    Leading Practice

    Financial Services Regulatory

  • Chambers & Partners

    Leading Individual

    Financial Services Regulatory

  • Legal 500

    Leading Individual

    Financial Services Regulatory

  • Legal 500

    "Recommended Practice"

    Financial Services Regulatory

  • IFLR 1000

    Leading Practice

    Financial Services Regulatory

  • Asialaw Profiles

    Leading Practice

    Financial Services Regulatory

  • Asialaw Profiles

    Market-Leading Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Leading Lawyer

    Financial Services Regulatory

  • Asialaw Leading Lawyers

    Market-Leading Lawyer

    Financial Services Regulatory

  • Asialaw Profiles

    Outstanding Practice

    Financial Services Regulatory

  • IFLR 1000

    "Positively Ranked"

    Financial Services Regulatory

  • IFLR 1000

    Highly Regarded Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Well Regarded Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Leading Practice

    Investment Funds

  • Chambers & Partners

    Leading Individual

    Investment Funds

  • Legal 500

    Recommended Practice

    Investment Funds

  • Chambers & Partners

    Leading Lawyer

    Investment Funds

  • Asialaw Profiles

    Leading Practice

    Investment Funds

  • Asialaw Profiles

    Market-Leading Lawyer

    Investment Funds

  • Asialaw Leading Lawyers

    Market-Leading Lawyer

    Investment Funds

  • Asialaw Profiles

    Highly Recommended

    Investment Funds

  • IFLR 1000

    Leading Practice

    Private Equity

  • IFLR 1000

    "Positively Ranked"

    Private Equity

  • AsiaLaw Profiles

    Leading Practice

    Private Equity

  • Who's Who Legal

    One of the World's Leading Practitioners

    Private Funds

  • Asialaw Leading Lawyers

    Market-Leading Lawyer

    Investment Funds

  • Corporate INTL Magazine

    Regulatory Law Firm of the Year in Hong Kong

    Financial Services Regulatory

  • Chambers & Partners

    Leading Practice

    Financial Services Regulatory

  • Chambers & Partners

    Leading Individual

    Financial Services Regulatory

  • Legal 500

    Leading Individual

    Financial Services Regulatory

  • Legal 500

    "Recommended Practice"

    Financial Services Regulatory

  • IFLR 1000

    Leading Practice

    Financial Services Regulatory

  • Asialaw Profiles

    Leading Practice

    Financial Services Regulatory

  • Asialaw Profiles

    Market-Leading Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Leading Lawyer

    Financial Services Regulatory

  • Asialaw Leading Lawyers

    Market-Leading Lawyer

    Financial Services Regulatory

  • Asialaw Profiles

    Outstanding Practice

    Financial Services Regulatory

  • IFLR 1000

    "Positively Ranked"

    Financial Services Regulatory

  • IFLR 1000

    Highly Regarded Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Well Regarded Lawyer

    Financial Services Regulatory

  • Chambers & Partners

    Leading Practice

    Investment Funds

  • Chambers & Partners

    Leading Individual

    Investment Funds

  • Legal 500

    Recommended Practice

    Investment Funds

  • Chambers & Partners

    Leading Lawyer

    Investment Funds

  • Asialaw Profiles

    Leading Practice

    Investment Funds

  • Asialaw Profiles

    Market-Leading Lawyer

    Investment Funds

Insights

  • Reminder: New Tax Exemption for Private Funds Commences on April 1, 2019

    With the gazetting on March 1, 2019 of the new Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Ordinance 2019 (“Amendment Ordinance”), from April 1, 2019, the tax position of investment funds in Hong Kong will be governed by a new tax exemption (“Private Funds Exemption”). Though the new exemption is broadly similar to the exemption (“Offshore Funds Exemption”) previously relied upon, there are significant differences, including:

  • The New Private Funds Exemption: an Update on Discussions with the Inland Revenue Department

    The Inland Revenue (Profits Tax Exemption Amendment) Bill represents a major step forward in allowing private funds, including hedge funds and private equity funds, managed from Hong Kong to obtain exemption from profits tax. Amongst other things, the Bill will provide bright line tax certainty for open-ended fund companies. At the same time, the Bill will allow funds to maintain their tax residency in Hong Kong, meaning that such funds will no longer be required to undertake board activities outside of Hong Kong and will no longer be required to maintain directors resident outside of Hong Kong to qualify for tax relief. Finally, the Bill will provide greater flexibility for tax relief in the context of private equity investments both in and out of Hong Kong. The Bill is on track to come into effect in April, 2019 and discussions with the IRD to date suggest that the IRD will be helpful in construing the legislation for the benefit of the asset management industry.

  • Private Funds Tax Exemption: New Legislation to Re-Center Hong Kong as an Asset Management Center

    On December 4, 2018, the Hong Kong Government introduced legislation introducing a new exemption for hedge funds, private equity funds and other private investment funds. Under the proposed legislation, both onshore and offshore funds (i.e. both Hong Kong and non-Hong Kong resident funds) may now qualify for full exemption from profits tax on the same basis and may now invest in a wider range of investments. If passed, the legislation will provide bright line guidance to exempt Hong Kong incorporated open-ended fund companies from Hong Kong profits tax and will mark an important step towards reducing Hong Kong’s reliance on offshore jurisdictions for asset management activities.