Insights

The MFSA have in February this year launched the framework for Collective Investment Schemes structured as Limited Partnerships without separate legal personality, referred to as Special Limited Partnership Funds (“SLPFs”), as part of the MFSA’s initiatives in relation to asset management.

The flexibility of the Limited Partnership Agreement & governance, liability structure, lack of separate legal personality, tax efficiency and other related features render the SLPF a versatile vehicle, making it an ideal choice for private equity and venture capital funds.

Key characteristics

Formation – An SLPF is set up through a Limited Partnership Agreement which is registered with and authorised by the MFSA entirely. The framework has been set in a way that formation is simple and streamlined offering a less burdensome process compared to other structures.

Flexible Limited Partnership Agreement – An SLPF is established through a Limited Partnership Agreement, with flexible requirements that provide greater freedom in structuring capital commitments and profit distribution. This allows for more customization making it easier to tailor the arrangements to the specific needs of a fund and its investors.

Furthermore, on an ongoing basis, it is only those LPA amendments concerning the matters mandatorily required to be included in the LPA which require the MFSA’s prior approval; other amendments will only necessitate a notification.

No separate legal personality – The SLPF itself does not have a distinct legal status from its partners; the representation of the SLPF is vested in the General Partner which is responsible for managing the business of the SLPF. The General Partner holds the assets of the SLPF and can contract and sue or be sued in the name of the SLPF.

Limited liability – The Limited Partners of the SLPF are liable only up to the amount of their capital contribution or commitment, providing investor protection, while the General Partner bears unlimited joint and several liability for debts of the SLPF.

Target investors & Regulatory Framework – SLPFs are available only to non-retail funds targeting qualifying and/or professional investors. The SLPFs may therefore be licensed or notified (as applicable) pursuant to one of the following regulatory fund frameworks: Professional Investor Funds, Notified Professional Investor Funds, Alternative Investment Fund or Notified Alternative Investment Funds.

For further information, please feel free to reach out to Andre Zerafa or Stephanie Farrugia from the Investment Services & Funds team.