Alexandra Heal’s recent article on the relationship between UK private capital and offshore fund jurisdictions is highly engaging, but I believe merits consideration from a broader perspective (“Private equity’s dash offshore triggers concerns over transparency of funds”, Report, January 12).
The attraction of offshore jurisdictions is a natural evolution of an international fund industry that has become larger and increasingly globalised. Today, there is a growing number of fund jurisdictions that have achieved a high degree of sophistication, offering asset managers a diverse range of options for establishing funds and meeting investor requirements. Focusing solely on “transparency” risks oversimplifying the issue.
EU jurisdictions such as Luxembourg are required to adhere strictly to EU legislative disclosure standards, and Luxembourg in particular continues to distinguish itself in terms of anti-money laundering compliance.
In reality, private capital operates across borders out of necessity rather than preference. While fund management, investment decision-making and value creation are best handled from offices close to portfolio companies and talent pools, fund structures are most effective when located in jurisdictions that facilitate cross-border capital raising, governance and regulatory certainty.
Priyanka Dutt
London WC2, UK