Private Eyes Only: Tax Issues in Private Equity Transactions

Private equity transactions refer to investments (and the sale or disposition of those investments) made by pooled investment vehicles (a private equity fund, venture fund, or other group of institutional investors) in the non-publicly traded securities issued by businesses or assets at varying stages of development. Tax issues abound at the fund, general partner/manager, investor, and portfolio levels when structuring a private equity investment product. There is no "one-size-fits-all" approach to fund formation, and often funds are comprised of multiple entities that invest side-by-side in the same investment or are formed to hold entirely different types of investments. 

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• Limited Partnership Agreement for a Private Equity Fund
  Reference this template private equity agreement. Private equity fund formation requires the drafting of documents ranging from marketing documents to service provider agreements. The formation document, which is an agreement between the general partner and the limited partners, is the limited partnership agreement (LPA). The LPA and certificate of limited partnership (which is filed with the state in which the fund will be domiciled), are the governing documents that set out the terms under which the fund will operate as agreed upon by the general partner and limited partners. 

• Limited Partnership Agreement for a Private Equity Fund – Tax Clauses
  Learn more, when drafting the limited partnership agreement, about what provisions to include to address the various tax issues relating to the private equity fund. 

• Private Equity Transactions Resource Kit
  Check out this resource kit which includes a host of guidance and materials to navigate different private equity transactions.

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