SLI’s private equity goes LLP
UK- Standard Life Investments has followed suit with the rest of the fund industry and altered the legal status of its private equity operation in a bid to retain key members of the investment team.
In an statement issued yesterday, Standard Life said SLIPE, its wholly-owned private equity subsidiary, has been "re-organised" as a limited liability partnership (LLP) to give nine key members of the team 40% of future profits and voting rights.
Reorganisation of the firm's legal structure has been done to "address the desire of certain existing and potential to ensure continuity of management and a greater alignment of interest between investors and the management team", according to Standard Life.
SL Capital Partners, as it is now known, is technically still 100%-owned by Standard Life. But the reforms mean should there be any major change in the status of the company, such as a takeover of the UK-based life insurer parent, executive members of SL Capital Partners have the right to acquire an extra 13% of the firm, then giving the board a majority holding and placing it in a position to consider a management buyout.
It means the existing management team, including chief executive David Currie, Peter McKellar and Stewart Hay, are likely to stay with the company which has so far built £3,4bn (€5bn) in assets under management through its fund of funds and Standard Life European Private Equity [investment[ Trust (SLEPET) offerings.
Standard Life still retains the capital value of the company but all business, assets and liabilities associated with SLIPE will transfer to SL Capital, including its remaining 28 employees based in Edinburgh and Boston, once the deal is completed on October 1.
Investment houses have traditionally developed their private equity operations as LLPs in to give its key staff a share in any future returns and maintain key member consistency.