The Hong Kong Limited Partnership Fund — An Attractive Alternative During an Economic Downturn

December 02, 2022 | BY

Susan Mok

Geoffrey Chan, Sophie Xue, and Nicholas Poon of Skadden, Arps, Slate, Meagher & Flom examine how the Hong Kong Limited Partnership Fund, which serves as a cost and tax efficient vehicle for private equity transactions, could become a popular alternative to traditional offshore fund structures for PE investments and fundraising in Greater China

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Summary

  • Hong Kong Limited Partnership Funds have been available since August 2020
  • A related carried interest tax concession scheme came into force in 2021
  • The new funds structure features contractual flexibility; investor limited liability and other protections; investor access to information; a high level of confidentiality; and low registration, operational and maintenance costs
  • Hong Kong Limited Partnership Funds are expected to offer an attractive route for private equity investments and capital raising during difficult economic times