The Investment Limited Partnership (ILP) Act has been updated to further enhance the attractiveness of ILPs for international investors. In June 2019, the Irish Finance Minister published the long-awaited ILP Amendment Bill. Following its approval in December 2020, the legislation is positioned to significantly change the alternative funds industry in Ireland.
The updated ILP allows asset managers to set up a European structure and distribute these funds via the AIFMD passport. A key feature of the new legislation is the removal of the requirement for the General Partner (GP) of the ILP to be regulated. Accordingly, the GP can appoint a third party AIFM or non-EU AIFM, depending on the investment strategy). The Board of Directors of the GP will be appointed to fulfil pre-controlled functions and will therefore be subject to the fitness probity rules and CBI guidelines.
A significant advantage of the ILP is that provided all service providers are approved by the Central Bank of Ireland in advance, the ILP can avail of their enhanced 24-hour authorisation process.
The ILP is a regulated common law partnership structure which will be of significant interest to Irish and international asset managers marketing to EU investors and wider global markets now that this new enhanced structure is available. The new ILP falls within the AIFMD regime and therefore can fully avail of the marketing passports and associated investor protection features.
With the attraction of investment though the ILP by asset managers it is expected that the ILP will create additional jobs and opportunities in the Irish and international market, which is particularly timely noting the challenges posed by Brexit and recovery from COVID-19. As a licenced and regulated service provider we offer the full one-stop-shop offering, and provide scale and efficiency, leaving asset managers with more time to focus on investments and their limited partners.