Financial advisory council bends over backwards for private equity funds
The advisory body is the much ballyhooed Financial Services Development Council, which has now finally started releasing discussion papers on the reforms it recommends.
The Hong Kong government should consider introducing a change in the law to allow private equity funds to be set up as limited partnerships, so as to further enhance the city's fund industry, a member of a government advisory body says.
The advisory body is the much ballyhooed Financial Services Development Council, which has now finally started releasing discussion papers on the reforms it recommends.
Strange to say, however, the paper it just released on private equity funds had nothing to say about limited partnerships other than that they will be considered in future. (Memo to FSDC head Laura Cha Shih May-lung: If you want people to consider your ideas, publish them first).
But as this talking shop wants to jump ahead of itself in this matter of limited partnerships, let's consider them here. The idea is that you have a few general partners who, as usual in a partnership, have management responsibility, share profits in defined proportions and bear responsibility for debts.
In addition to these general partners, however, you have any number of limited liability partners who get a dividend, can lose no more money than they put in and, critically, have no management control.