Private equity investment scheme under Law 22/2014 Abstract

Nº 2 / 2015 - abril-junio

Private equity investment scheme under Law 22/2014

José María Gil-Robles
J&A Garrigues, S.L.P
José Manuel Martín
J&A Garrigues, S.L.P


The present publication is intended to describe the investment scheme of private equity companies, which lays down rules regarding the activities they can (and cannot) carry out, in which assets they can or shall invest, under which circumstances and to what extent. From Royal Decree-Law 1/1989, of 14 March, which regulated private equity activities for the first time, to current Law 22/2014, of 12 November, private equity regulatory framework has experienced continuous and significant changes. The turning point was the enactment of Law 1/1999, of 5 January, which introduced the distinction between private equity companies and funds as well as group restrictions and mandatory investment diversification ratio. Subsequent provisions, such as Law 25/2005, of 24 November, said to be the real boost of private equity in Spain, complemented and led the way to current Law 22/2014. This is true reflection of the strong desire of the legislator to increase flexibility, clarify and adapt the private equity regulatory framework to changing economic conditions.

Keywords: private equity; closed-ended investment entities; core activity; ancillary activities; eligible assets; mandatory restricted investment ratio; mandatory investment diversification ratio; unrestricted