NETHERLANDS Law and Practice Contributed by: Vilmar Feenstra, Robert Veenhoven, Joyce Kerkvliet and Sebastiaan Verkerk, Loyens & Loeff N.V.
1. Market Overview 1.1 State of the Market
2. Alternative Investment Funds 2.1 Fund Formation 2.1.1 Fund Structures In the Netherlands, depending on the tax analyses performed in relation to them, alternative invest - ment funds (AIFs) are generally structured in the form of a limited partnership ( commanditaire vennootschap , or CV), a co-operative ( coöpera - tie , or Coop), a contractual fund for joint account ( fonds voor gemene rekening , or FGR) and/or a private limited liability company ( besloten ven- nootschap met beperkte aansprakelijkheid , or BV), or a combination thereof. Private Equity Funds Private equity funds are generally structured in the form of a CV or a Coop. CV A CV is a limited partnership for the purpose of a durable co-operation between one or more managing (or general) partners ( beherend ven- noten ), each with unlimited liability, and one or more limited partners ( commanditaire vennoten ), with limited liability (see 2.1.3 Limited Liability ). A CV has no legal personality and is not a sepa - rate legal entity distinct from its partners. In prin - ciple, assets cannot be held by a CV in its own name, but are held by a community of property of the partners ( gemeenschap ) or by one or more partners or a third party for the account of the community of property of the partners. Inves - tors participate in the CV as limited partners and receive a limited partnership interest in the AIF. Substantially all terms and conditions of an AIF can be laid down in the limited partnership agreement of the CV. A proposed legislative reform may impose sub - stantial changes to Dutch partnership laws (see
The Netherlands is a jurisdiction commonly used for the formation of investment funds, and has a sophisticated, clear and flexible legal and gov - ernance system. In addition to its stable busi - ness and political environment, the Netherlands has various tax advantages that also make it an attractive fund jurisdiction. Capital is raised both internationally and from domestic investors (eg, Dutch pension funds). As a location for private equity and venture capital funds, the Netherlands is typically used by fund managers who operate in and from the Netherlands. However, the Netherlands is also frequently used as a fund structuring and plat - form jurisdiction by fund managers who have their head offices outside the Netherlands, in which case they typically have some form of presence in the Netherlands, often for opera - tional purposes. Despite a slowdown in deal volume, the Dutch fundraising market continues to demonstrate resilience and growth. Although there is a trend of fundraisings taking longer, Dutch fund manag - ers are still able to secure substantial funds from a diverse range of investors, including, but not limited to, Dutch pension funds, insurance com - panies, family offices, high-net-worth individu - als and regional public investment institutions. Investing in private equity funds is becoming more common among individuals, with a trend known as the “retailisation” of private markets. This comprises offering people the chance to invest through so-called “feeder” vehicles.
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