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Our client Fiera Real Estate UK Limited wished to set up a new fund with a proposed value of £150m. Fiera was working with its existing UK-based cornerstone investor which represents UK pension funds, however they also wanted to expand this to include a US-based intermediary representing several US and non-US prospective investors.
Although we have a very good working relationship with Osborne Clarke, Fiera’s UK lawyers, the new US investor base had their own lawyers, with whom we had no prior contact. The nature of the investment was also new to the US investors and as such, their understanding of the fundamentals of the structure was limited.
The main purpose of the tax structuring was to ensure there was no tax leakage for tax-exempt investors, such as UK pension funds. However, because of the US angle and certain domestic tax rules in the US, there was a decision to be made as to whether the US investors wanted to retain that model or not. The non-UK investors needed a lot of assurance on the structure itself, as well as tax opinions on certain aspects of it. Their tax position was discussed at length to determine which options for amending the structure worked best for them.
Our discussions resulted in several amendments to the standard structure to accommodate this. This took a significant amount of engagement, but eventually a bespoke addition was added without changing the main purpose for the UK investors. The UK investors were happy with the outcome too, and fully satisfied that the structure was set up to achieve what was intended.
Fiera successfully raised the equity from both UK and US-based parties. The fund launched in June 2022 with £180m of initial capital committed, which was above its original target.
“We were delighted that our tax team could work with Fiera and their advisors to facilitate the fund set up. We were especially pleased to have been able to provide an additional level of support in relation to the non-UK investor angle. We look forward to working with all parties again on future matters.” Gary Moment, Tax Director at Simmons Gainsford
“As our business continues to grow and attract investment from a wider investor base, we are very happy to work with Simmons Gainsford and other advisors that provide excellent support and advice that helps us to achieve our objectives. We are especially pleased that Simmons Gainsford not only has the technical expertise to deal with additional layers of complexity, but that they are also very willing to engage in the wider discussions to come up with solutions that ensure successful outcomes for all parties.” Chris Button, Head of Value Add REIM at Fiera Real Estate
“The close working relationship between Simmons Gainsford and Osborne Clarke, that has been established over many years of working together for Fiera, really paid dividends here. We were able to find tax and legal solutions to some difficult structuring issues, whilst always being aware of Fiera’s key commercial drivers.” Tim Simmonds, Partner at Osborne Clarke LLP
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