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Fund domicile trends and developments; Everyone wants to know more about MAC

IQ-EQ's head of funds on the latest in domiciles; what does coronavirus mean for MAC clauses?

Fund domiciles: Philippa Kent talks with IQ-EQ’s Justin Partington about seven trends in private fund domiciles. The private equity-backed investor services group recently went global with the acquisition of Blue River Partners in the US, and Partington points out some of the big legal changes causing funds to switch tack on certain domiciles, as well as some key developments to look out for.

MAC: Alex Lynn in sister pub Private Equity International’s Hong Kong office brings us this article on firms trying to assess whether the coronavirus can trigger ‘material adverse change’ clauses, and that some are – unsurprisingly – pushing for longer due diligence windows to better understand the effect the virus has on target acquisitions, as well as to bide time until the MAC question becomes clear. Some firms are worried counterparties will try to trigger the clauses themselves.

With the bar for MAC clause triggers set pretty high – judges don’t like to be seen rewarding buyers’ remorse – the question hinges on whether the spread of the virus can be seen to have an outsize effect on a given target’s business. But proving that with markets plunging across the board and economies slowing down could be hard.

Email prepared by Graham Bippart