UK private equity firms have significantly increased their use of offshore jurisdictions since Brexit, raising concerns around transparency, according to a report by the FT citing research from the University of Glasgow.
British managers established around half of their funds outside the UK over the past four years, up from roughly a quarter between 2010 and 2015. Around a third of these vehicles were domiciled in Luxembourg, reflecting demand from investors for EU-based fund structures and the country’s established legal and regulatory framework.
The shift has prompted concerns that offshore jurisdictions often provide less public visibility around fund ownership and investor identity, at a time when the sector is attracting more investment from individual investors.
The study also found that around 18 per cent of UK private equity funds launched over the past four years were registered in Guernsey, which is seen as a lower-cost option for smaller vehicles. British Private Equity and Venture Capital Association Chief Executive Michael Moore said the UK remains a global private capital hub but warned that continued legal and regulatory reform would be needed to remain competitive as other jurisdictions seek to attract fund formation.
