Historically, private equity firms have often managed their funds from abroad. More recently, there has been a clear reversal of this trend in favour of repatriating the management of funds and establishing funds as Swedish limited companies. Vinge has formed a new Private Funds practice group in order to be in a better position to advise in conjunction with Swedish fund formations.
According to Mattias Schömer, partner at Advokatfirman Vinge, there are several reasons why private equity managers have shifted to move the management to Sweden:
“There is now confidence among private equity firms and investors that Swedish legislation within the corporation and taxation fields is both long-term and stable. We also see from various external sources, from the European Union, different public authorities and investors, that there is a demand that funds and private equity firms should be taxed in the country from which the majority of their business is conducted. Finally, many of the private equity firms which have chosen to establish funds in Sweden have produced great returns, which is an acknowledgement that the Swedish model delivers”, says Mattias Schömer.
One positive result of the Swedish model is that private funds are from a corporate perspective completely transparent since they now act as Swedish limited companies.
“To establish funds in Sweden is a safe alternative in a rapidly changing tax and regulatory climate, which provides opportunities to focus on the business instead of structural issues”, says Mattias Schömer who, in his capacity as a pioneer in the field, created the first Swedish AB fund structures for private equity managers.
The market for such small and medium sized private equity funds, with capital commitments within the sphere of SEK 2 – 10 billion, has now grown to such degree that Vinge has chosen to form a new practice group headed by Mattias Schömer. Together with Martin Cronsioe and Marcus Andersson, newly recruited from the AP funds, Mattias Schömer will manage and develop the new Private Funds practice group.