A Quick Guide to Bilateral Investment Treaty Protection
Bilateral Investment Treaties (BITs) contain important protections for foreign investors and should be considered carefully before structuring an investment.
BITs are agreements between two states regarding the treatment of investors from one state (the home state) investing in the other state (the host state). BIT protection is especially important in high-risk jurisdictions These protections include, most critically, the possibility of resolving any disputes that arise between the investor and the host state before a neutral, international arbitral tribunal.
Cross Border and Multi Jurisdictional Carve-Outs: Perspectives of a Private Equity Buyer and Strategic Seller
Andrew J. Warmus
Corporate carve-out transactions can be complicated, administratively burdensome, and difficult to execute well. These difficulties become particularly pronounced where a corporate seller without significant experience in PE transactions divests a global business to a PE buyer with a minimal global footprint and limited cross-border experience. As a result, corporate carve-outs have historically been the domain of specialised groups with deep experience in the area.
Investing in Professional Sport
Thomas P. Conaghan
Greg C. Berson
Professional sports teams are synonymous with prestige, entertainment and, now more than ever, rising valuations. In the United States, there are four dominant professional sports leagues: National Football League (NFL), National Basketball Association (NBA), National Hockey League (NHL), and Major League Baseball (MLB). These leagues are comparable with the economics and stature of other sports leagues across the world, most notably the top football/soccer and baseball leagues such as the English Premier League, Spanish La Liga, and Japanese Nippon Professional Baseball, or cricket’s Indian Premier League.
As the price of, and return on investment in professional sports continues to rise, the investor pool has expanded from individual billionaires to private equity firms, sovereign wealth funds, and other institutional investors looking to cash in on this lucrative, yet scarce, asset class.
Asia Healthcare and Life Sciences Trends: What to Look Out for in 2024
There are a number of factors that make the Asian Life Sciences sector an attractive investment opportunity. Many Asian countries have, or will soon have, rapidly aging populations, driving demand for a range of healthcare and ancillary services for the elderly. In addition, as lifestyles change and rapid urbanisation continues in emerging Asia, the prevalence of chronic conditions requiring treatment and care management over the longer term is increasing.
Furthermore, as Asian populations become more affluent, in addition to healthcare and related innovative treatments they are increasingly willing to spend on ancillary services, such as wellness, nutrition, and senior living. This will create new market and investment prospects allied to primary healthcare and life sciences opportunities.
This increase in wealth is also fueling the rapid spread of health insurance coverage across Asia, with take-up increasing as demand and incomes rise. In addition to basic public schemes available across some Asian countries, many global private insurers are now providing significant additional coverage, making it viable for healthcare providers to expand services, including more complex diagnostics and treatments.
Hedging Currency Volatility Risks in Cross-Border M&A Deals
Managing FX fluctuation risk is an important part of the overall considerations that any M&A or investment team need to be familiar with.
Private equity sponsors in particular will be focused on the purchase and sale FX risk. Whenever a buyer or seller are entering into a sale and purchase agreement that is denominated in a currency that is different to the currency in which the sponsor draws on the limited partners commitments, or the currency in which the limited partners need to be repaid, the exchange rate fluctuation between the relevant currency pair can create uncertainty. This is because the amount needed from the limited partners to close the transaction, or the amount ultimately repaid, will depend on the then available FX rate.
A typical example of this situation would be when a US based private equity fund with commitments denominated in US dollars enters into a sale and purchase agreement with respect to a European target where the purchase price is denominated in Euros.
Strengthening EU Economic Security: The Anti-Coercion Regulation and Outward Investment Control Initiative
After the considerable extension of foreign investment screening in EU Member States, and the recent entering into force of the Foreign Subsidies Regulation, which obliges non-EU companies to declare public subsidies they receive before bidding for public contracts or taking over European companies, several recent announcements made by the European Commission show its willingness to pursue the objective of strengthening the economic security of Member States.
In this context, two new EU legal instruments could have major implications for European and non-European companies and investors operating on the internal market: the Anti-Coercion Regulation (ACR) and the potential outward investment control initiative.
The Impact of the New EU Foreign Subsidies Regulation
WHAT CONSTITUTES A FOREIGN SUBSIDY
The FSR applies to any company doing business in the European Union. It will be considered to have received a “foreign subsidy” if the following four criteria are satisfied:
- A financial contribution (such as interest-free loans, unrestricted guarantees, capital injections, preferential tax treatment, tax credits, or grants) is awarded to support the activities of a business entity.
- The financial contribution is supplied either directly or indirectly by a third country from outside the European Union.
- The contribution results in a discernible advantage being conferred upon the business entity.
- This advantage is selective.