Private Equity
Legal structuring of equity investments and exit mechanisms.
Private equity investments combine the acquisition or subscription of an equity interest, governance rights and liquidity expectations. The choice between a direct investment and a collective investment vehicle produces different corporate, regulatory and tax effects. When the structure uses a private equity investment fund (FIP), the CVM rules pertaining to the vehicle and to the assets apply. In direct investments, the corporate form and the agreements between investors and founders define rights, duties and forms of participation in decisions.
Legal work includes due diligence on the investee company, negotiation of the investment instruments and organization of protection and exit mechanisms. Economic preferences, veto rights, information obligations and drag-along and tag-along rules must be compatible with one another. Contingencies, conditions precedent and any required regulatory or antitrust approvals are also examined. The documentation must distinguish what depends on a corporate resolution from what constitutes a contractual obligation, including during the coexistence among investors and in preparing the divestment.
Our work
- Investment agreements and shareholders' or quotaholders' agreements
- Structuring of vehicles and governance rights
- Exit mechanisms and allocation of contingencies
Does every private equity investment need to use a FIP?
No. The investment can be direct or made through other vehicles. The choice depends on the participants, the strategy and the corporate, regulatory and tax requirements.
Editorial review: