New Limited Partnerships Act and Protected Cells Partnership Act: breakthroughs for the Gibraltar funds industry.

Following a joint effort from Her Majesty’s Government of Gibraltar (“HMGoG”), the Gibraltar Funds and Investments Association (“GFIA”) and the Gibraltar Financial Services Commission (“GFSC”), with guidance from Paul Hastings LLP in London HMGoG, have announced the coming into force of the Limited Partnerships Act 2021 and the Protected Cell Limited Partnerships Act 2021. The new statutory framework guarantees the modernisation of the funds industry in Gibraltar ensuring that the jurisdiction remains robust and innovative in the provision of financial services.

The Protected Cell Limited Partnerships Act 2021 came into force on 25^th November 2021 and it allows funds structured as limited partnerships to create one or more cells that are statutorily segregated from each other. This means that much in the same way that a protected cell company can create different sub-funds with distinct strategies or fee structures, a fund structured as a limited partnership can now do the same and benefit from the statutory protection as do protected cell companies. This is particularly important to real estate, private equity and debt funds.

With the introduction of the new Limited Partnerships Act 2021, limited partnerships will offer:

•  the partnership interests of limited partnerships being represented by shares, bonds, notes, loans or other debt securities or instruments;
• limited partners being able to undertake a more active role in the affairs of the limited partnership without forfeiting their limited liability; and
• the general partners of a limited partnership may elect whether or not the limited partnership is to have legal personality.

James LasryFunds/Deputy Head of the Financial Services Team at Hassans and Deputy Chairman of GFIA, assisted in the formulation of these bills. He said:

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“This is an absolute breakthrough for the Gibraltar funds industry. Managers have long used PCCs for multi-strategy funds, but they have had to create separate funds when those investments require the tax transparency of a limited partnership, Gibraltar is one of the few jurisdictions in the world to have this innovative new legislation. This is a further example of the effective cooperation between HMGOG, the GFSC and the Gibraltar funds industry represented by GFIA.”