03Mar
Our German practice issued a new publication on the Private Equity Investments in the Automotive Supplier Industry.
It describes how the automotive industry has been hit hard in 2008 with a decline in global GDP growth leading to a decline in its business prospects, uncertainty about the direction the industry will take and the drying up of credit facilities, as confirmed in recent evolutions. As in other industries, investment activity has come to a halt and the industry suffered a substantial loss of shareholder value.
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Tags: Automotive Supplier Industry, Investments, Private Equity
14Jan
The French Senate has adopted an amendment to the Draft Finance Act for 2009 (article 4bis of the DFA) for the purpose to address the tax treatment of carried interest shares granted to FCPR (Fonds Communs de Placement à Risque) and SCR (sociétés de capital à risque) managers.
Subject to any possible amendments, the proposed new tax regime for carried interest shares would apply to FCPRs and SCRs set up as from January 1st, 2009, and to shares/rights issued as from this date.
Current tax regime
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Tags: carried interest, France, incentive, Private Equity
18Dec
To meet their performance objectives, private equity firms must rely on talented, highly motivated managers within their portfolio companies.
To date, aligning the financial interests of portfolio company managers with those of investors has proved to be the most motivational tool in driving them forward. But is this alignment still there in the current financial and economic downturn, which may have resulted in a drop in enterprise value?
One consequence of the current financial and economic crisis is that private equity houses may have to cope with “underwater” equity and should consider resetting management incentives so that they continue to deliver what they are intended to: retention, motivation, reward and alignment. The question is how this resetting can be appropriately structured from a tax and legal perspective.
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Tags: incentive, Management, Private Equity, sweet equity
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