Private equity (fund formation)—Spain—Q&A guide
Private equity (fund formation)—Spain—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (fund formation)—Spain—Q&A guide
  • 1. What legal form of vehicle is typically used for private equity funds formed in your jurisdiction? Does such a vehicle have a separate legal personality or existence under the law of your jurisdiction? In either case, what are the legal consequences for investors and the manager?
  • 2. What is the process for forming a private equity fund vehicle in your jurisdiction?
  • 3. Is a private equity fund vehicle formed in your jurisdiction required to maintain locally a custodian or administrator, a registered office, books and records, or a corporate secretary, and how is that requirement typically satisfied?
  • 4. What access to information about a private equity fund formed in your jurisdiction is the public granted by law? How is it accessed? If applicable, what are the consequences of failing to make such information available?
  • 5. In what circumstances would the limited liability of third-party investors in a private equity fund formed in your jurisdiction not be respected as a matter of local law?
  • 6. What are the fiduciary duties owed to a private equity fund formed in your jurisdiction and its third-party investors by that fund’s manager (or other similar control party or fiduciary) under the laws of your jurisdiction, and to what extent can those fiduciary duties be modified by agreement of the parties?
  • 7. Does your jurisdiction recognise a ‘gross negligence’ (as opposed to ‘ordinary negligence’) standard of liability applicable to the management of a private equity fund?
  • 8. Are there any other special issues or requirements particular to private equity fund vehicles formed in your jurisdiction? Is conversion or redomiciling to vehicles in your jurisdiction permitted? If so, in converting or redomiciling limited partnerships formed in other jurisdictions into limited partnerships in your jurisdiction, what are the most material terms that typically must be modified?
  • 9. With respect to institutional sponsors of private equity funds organised in your jurisdiction, what are some of the primary legal and regulatory consequences and other key issues for the private equity fund and its general partner and investment adviser arising out of a bankruptcy, insolvency, change of control, restructuring or similar transaction of the private equity fund’s sponsor?
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Private equity (fund formation)—Spain—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (fund formation) in Spain published as part of the Lexology Getting the Deal Through series by Law Business Research (published: December 2020).

Authors: Alter Legal—Alejandra Font; Carlos de Cárdenas; Manuel García-Riestra; Víctor Doménech

1. What legal form of vehicle is typically used for private equity funds formed in your jurisdiction? Does such a vehicle have a separate legal personality or existence under the law of your jurisdiction? In either case, what are the legal consequences for investors and the manager?

The Spanish Law on Venture Capital Entities (Law No. 22/2014 of 12 November 2014) contemplates three main different types of venture capital entities: private equity funds (FCRs), private equity companies (SCRs) and venture capital entities for small and medium-sized investments (ECRs-Pyme). The Law refers to FCRs, SCRs and ECRs-Pyme as venture capital entities (ECRs).

FCRs, SCRs and ECRs-Pyme must be registered with the Spanish Securities Exchange Commission (CNMV). ECRs are regulated and supervised by the CNMV.

Venture capital entities can be managed by management companies of closed-ended collective investment entities (SGEICs) or by management companies of collective investment schemes (SGIICs). Both management entities require authorisation by the CNMV and are subject to supervision and regulation by the CNMV.

FCRs

An FCR is a pool of assets divided into units, without legal personality. An FCR must comply

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