PORTUGAL Law and Practice Contributed by: Diana Ribeiro Duarte, Pedro Capitão Barbosa and Catarina Almeida Andrade, Morais Leitão, Galvão Teles, Soares da Silva & Associados
Lastly, Portugal’s lively start-up ecosystem remains a focal point for both private equity and venture capital investors (Portuguese and foreign alike), with increased interest in early-stage investment. Lisbon, Porto and Braga continue to gain traction as innova - tion hubs, attracting venture capital and early-stage funding into sectors such as fintech, AI, digital health and green technologies. At the fundraising level, domestic fundamentals remain strong, with the trends from previous years still influencing activity. The Recovery and Resilience Plan (RRP) continues to provide substantial capital for green and digital transformation initiatives, often through co-investments with private equity vehicles. Meanwhile, high net worth individuals and family offices, particularly those seeking Golden Visa-linked exposure, continue to channel capital into qualified Portuguese funds. These fundamentals have contrib - uted significantly to the sustained expansion of the Portuguese private equity industry, with assets under management by domestic private equity companies and funds more than doubling from 2015 to 2023 (as assets under management grew from circa EUR4 bil - lion to circa EUR9 billion). As of this writing, the 2024 data was not available. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions In line with the trend in the rest of the EU, the demand for regulatory compliance of (alternative) fund manag - ers has been steadily increasing in the past few years in Portugal. Private equity is not impervious to this, with both EU-wide sustainability rules and evolving domestic frameworks reshaping how funds are incor - porated, supervised and marketed. Adapting to ESG Rules Private equity fund managers continue to implement European rules on ESG matters via the mandatory disclosure requirements of Regulation (EU) 2019/2088 of the European Parliament and of the Council (SFDR), as well as Regulation (EU) 2020/852 of the European Parliament and of the Council (Taxonomy Regulation) and associated Level 2 Regulations.
To the authors’ knowledge, several private equity funds are applying for, operating as and sometimes downgrading to “SFDR Article 8” funds, which reflects growing interest from investors in the product and efforts from fund managers to structure and imple - ment it (with the hope of improving their chances of successfully fundraising for ESG-driven limited part - ners). Additional ESG-related obligations derive from the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Direc - tive (CSDDD), with the latter being adopted in May 2024. These directives impose extensive due diligence and disclosure requirements on large EU companies and certain non-EU operators, including companies within private equity portfolios. As a result, private equity sponsors are increasingly factoring sustaina - bility and human rights compliance into their due dili - gence, risk management and exit planning strategies. In May 2025, the European Commission launched a public consultation on a major SFDR review, aiming to simplify the regulation, address legal uncertainty and enhance the integrity of ESG labelling. Stakeholders were invited to submit general feedback (as opposed to providing replies to specific queries as in 2023’s SFDR consultations). The outcome will certainly fur - ther assist in shaping fund structuring and investor practices in the coming years. Together, these frameworks demonstrate a continu - ous regulatory push towards responsible investment and sustainable finance. For private equity funds, this translates to operational demands as it continues to be challenging for managers, investors and regulators to be able to catch up. New Fund Management Legal Framework In April 2023, Decree-Law No 27/2003 of 28 April was published, having entered into force in 2023. This stat - ute approved the new asset management framework, which fully revised the former private equity legal regime (Law No 18/2015), as well as of the former Portuguese legal regime for undertakings for collec - tive investment in transferable securities (UCITS) and other alternative investment funds (Law No 16/2015), merging these two statutes into one and enacting
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