- A study finds UK private equity funds have shifted domiciles from mostly UK-based in the early 2000s to over 60% outside the UK recently, mainly to Luxembourg and Guernsey.
- It labels these vehicles “offshore” only in the statistical sense of being non-UK domiciled, not as tax havens or lightly regulated jurisdictions.
- Brexit-driven loss of EU AIFMD passporting is pushing UK managers to use Luxembourg AIFMD-compliant structures to keep access to EU institutional capital.
- The key concern is reduced public visibility of fund and investor details once vehicles move off UK registers such as Companies House, even if regulators still have transparency.
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The recent University of Glasgow study by Paul Lavery documents a major shift in where UK private equity funds are domiciled: namely, toward jurisdictions outside the UK. Analyzing over 1,000 limited partnerships managed by UK firms—and covering more than 25,000 capital commitments by around 3,000 institutional investors globally from 2000 to 2025—it finds that while just over 10% of fund vehicles were domiciled outside the UK in the early 2000s, that share has surged to over 60% in recent years. The favoured domiciles are Luxembourg and Guernsey. Crucially, the term “offshore” in this study refers strictly to non-UK jurisdictions—no assumption is made about the regulatory quality or tax status of those places.
Post-Brexit regulatory developments help explain much of this trend. The UK’s departure from the EU resulted in the loss of automatic passporting under the Alternative Investment Fund Managers Directive (AIFMD), forcing UK-based managers who wish to market funds to institutional investors within the EU to either rely on National Private Placement Regimes (NPPRs) or set up EU-domiciled, AIFMD-compliant vehicles—Luxembourg being a leading option due to its established fund ecosystem and regulatory stability. Nigel Williams emphasizes that Luxembourg continues to enjoy full transparency under EU regulatory regimes, though he notes that information previously available in UK public registers (such as investor names and commitment amounts) becomes less accessible when using non-UK domiciles.
This transformation carries strategic implications. UK fund managers risk losing competitive edge if the regulatory, tax, and marketing constraints of the UK push them offshore for structural reasons. Access to EU institutional capital is increasingly expensive or impracticable without compliance under EU law. Additionally, shift in domiciliation may affect investor confidence, reporting obligations, and public accountability. Policy responses may include reforms to UK transparency regimes, tax policies, and regulatory equivalence to EU standards.
Open questions remain: whether Luxembourg or comparable jurisdictions maintain or enhance transparency standards compared to the UK; how divergent regulatory changes (such as under AIFMD II) will play out; and whether the burden on UK firms of NPPRs and other fragmentary regimes will lead to further relocations or changes in structure.
Supporting Notes
- Paul Lavery’s dataset covers ~1,000 UK PE/Growth equity funds managed by UK companies over 2000–2025, with 25,000 capital commitments from ~3,000 institutional and several thousand individual investors in almost 70 countries.
- The percentage of vehicles domiciled outside the UK has risen sharply: just over 10% in the early 2000s to over 60% in the recent period. The main domiciles are Luxembourg and Guernsey.
- Definition: ‘offshore-domiciled’ funds in the academic study refers strictly to those not registered in the UK; Luxembourg is categorized this way purely for statistical classification, not as a tax haven or lesser regulated jurisdiction.
- The loss of the EU AIFMD passport for UK firms means they must rely on National Private Placement Regimes, and many UK managers now establish Luxembourg-domiciled AIFMD compliant vehicles to maintain access to EU institutional investors.
- Nigel Williams disputes that regulatory or transparency standards are weaker in Luxembourg vs. the UK; he asserts transparency is “total before the European regulatory authorities,” but notes that public visibility (e.g. investor names, commitments) is reduced when funds are domiciled outside UK public registers.
- Academic study emphasizes loss of public accessibility as funds shift domiciles: Companies House has historically provided detailed access to fund structures, names of investors and pre-2017, committed amounts; all of which become less accessible when domiciled outside UK.