Conduits of Capital

SPOTLIGHT: DO FUND DOMICILES DRIVE LP ALLOCATION DECISIONS?
Amongst survey respondents, 46% of LPs and 27% of GPs report that the location of a fund’s
domicile has, in their experience, prevented a commitment to a Sub-Saharan Africa-focussed
private equity vehicle. When segmenting LP responses by type of institution, DFIs were more likely
to decline a commitment due to the jurisdiction of a fund domicile.
* Includes public and corporate pension funds.
Domiciles that Have Prevented LP Commitments
When prompted to disclose the location of the domicile(s) that prevented commitments, LPs listed
the following jurisdictions:
− Bermuda;
− British Virgin Islands;
− Cayman Islands;
− Kenya;
− Luxembourg;
− Mauritius;
− Mozambique;
− Nigeria;
− South Africa; and,
− Zimbabwe.
It should be noted, though, that LPs’ perceptions
of the suitability of a domicile for a fund can and
do change. A domicile deemed unsuitable in
2013 may well be acceptable in, say, 2016 if, for
example, the jurisdiction’s status under the OECD Global Forum of Tax Transparency and Exchange
of Tax Information changes.
Prospectively, a majority of LPs and GPs believe that a fund domicile could prevent an LP
commitment to a fund.
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