The active limited partner is a limited partner, who wants to take part in the business of the partnership, participates in the managerial and control of the limited partnership. That is a limited partner active without liability from limited partnership obligations.
Private equity firms have two different actors: the general partner who runs the business of investing and managing the portfolio and the limited partner who invest money in the business. Their respective role is well defined by statutes and not interchangeable. Thus, the limited partner cannot get involved in the business of investing the money of the fund, an activity allocated to the general partner. Continue reading
In Part I of this presentation, we offered an overview of the Foreign Corrupt Practice Act (“FCPA”) of 1977, the anti-bribery law that makes it a crime to corrupt foreign officials by means of payments, for the purpose of obtaining or retaining business.
In this Part II, we examine criminal prosecutions brought by the U.S. government under the anti-bribery law in what pertains to corporations or individuals doing business in Sub-Saharan Africa (“SSA”). Continue reading
The Foreign Corrupt Practices Act of 19771 (“FCPA”), is the anti-bribery law that prohibits corrupt payment to foreign officials for the purpose of obtaining or retaining business. The U.S. Department of Justice (“DOJ”) is the chief enforcement agency of the law and coordinates with the Securities and Exchange Commission (“SEC”). The DOJ enforces criminal and civil provisions related to “domestic concern” – as defined below- foreign companies and nationals, while the SEC oversees civil enforcement with respect to issuers of securities. Continue reading
Posted in BUSINESS
Tagged AGOA, Angola, bribery, Chad, DOJ, Ethiopia, FCPA, FCPA and Sub Saharan Africa, Gabon, Ghana, Nigeria, South Africa
It has been widely reported that the SEC is stepping up its oversight on the private equity industry due to insider trading investigations1 in one hand and the newly adopted Dodd-Frank legislation, which forces private funds to register as investment advisors, thus becoming subject to the Commission registration process.
It is also noticeable the insider trading cases related to mid-level employees acting in total disregard of their firms’ policy. Continue reading
To follow up on a previous article asking whether private equity investors needed protection (SeeDo Private equity investors need protection?), the Dodd-Frank Act¹ (the “Act”) says yes.
How come? Private equity investors were considered the most sophisticated investors and the U.S. securities laws did not really care about people who could “fend for themselves”, meaning they were able to obtain the same kind of information contained in a prospectus, the document required when soliciting, selling, and buying a security.Well… Continue reading
Posted in INVESTORS, REGULATION
Tagged accredited investors, Dodd-Frank, Investment Advisers Exemption, Investors Protection, Private Equity, Private Equity Investors, Qualified Clients, Registration, Systemic Risk, Volker Rule
That the African soil is full of commodities is an understatement. Great wealth lies in the part of the continent located in the Central African region that includes Cameroon, Chad, Central Africa Republic, Congo, and Equatorial Guinea. This vast territory has access tothe Atlantic Ocean from Cameroon, Equatorial Guinea and Gabon.
To name a few commodities: clay, bauxite, cobalt, diamond, gold, natural gas and crude oil. Quite often huge reserves are discovered: in 2009, a South Korean geologist in cooperation with the Cameroonian government discovered what is said to be one of the world’s biggest reserve of diamond evaluated at 736 carats! Other commodities that include oil, are underexplored. Continue reading
Posted in BUSINESS
Tagged Cameroon, Cameroon SNH, Central Africa, Chad, Chad SHT, Congo, Congo SNPC, Equatorial Guinea, Gabon, Oil company, Sudan
The private equity secondary market also known as “secondary sales” or “secondaries”, promises to offer liquidity from an asset class that is illiquid by definition: private equity limited partnership interests. In the United States, most private equity funds are formed through partnership agreements between a General Partner (“GP” or GPs”) and Limited Partners (“LPs”). Partnership agreements have a finite life of ten years or more, and during that period, anything can happen.
For Limited Partners, some events that trigger early exit and sales of limited partnership interests include: new regulations, lack of liquidity to fund capital calls, divestment from the private equity market. In addition, in a situation where a credit freeze is followed by an unprecedented financial crisis, rebalancing asset allocation becomes integral. Continue reading
Limited Partners (“LPs”) are usually described as passive investors. They invest money into venture capital and private equity firms, known as general partners (“GPs”). General partners offer expertise and make managerial decisions on the partnership business: whether to buy, finance a start up or company, take a company public or sell it, and all other matters related to the partnership business.
In 2001, the new Uniform Limited Partnership Act (“ULPA”) abolished the control rule that prohibited a limited partner from taking part in the business of the partnership. Thus, a limited partner will no longer be held liable for limited partnership obligations “even if the limited partner participates in the managerial and control of the limited partnership”. Continue reading
Private equity investors are known to be sophisticated investors, which means that “protection” as defined by federal securities law is minimal. Compared to retail investors who have always been the focus of federal securities laws, sophisticated investors, due to their intellect or wealth, do not require any sort of protection.
Federal securities laws protect investors by requesting the registration of securities with the Securities and Exchange Commission (“SEC”). The registration process requires disclosure of material information necessary to make an informed investment decision. Continue reading
Posted in INVESTORS
Tagged accredited investors, Federal Reserve, financial stability, General Partners, Investment Advisers Act, Investment Company Act, Investors Protection, limited partners, Qualified Purchasers, Registration, Regulation, Regulation D, SEC, Sophisticated Investors, Systemic Risk, The Endowment and Private Equity Survey, Venture Capital