Private Equity Club 2006EU Expert Report on Private Equity Monday 13 November

30 Pavilion Road, Knightsbridge, SW1X 0HJ

5.00pm

European Commission Expert Report on Private Equity

At the Private Equity Club meeting on Monday 13 November we will meet

to discuss the impacts and implications of the EU Expert Report on Private

Equity. The Club meeting aims to raise awareness of the Expert Report

findings and debate the issues and recommendations further.

To commence Brendan McMahon of PwC, will chair and introduce the

topic, next Darren Docker, PwC Tax, will discuss the increased concern

about tax in structuring private equity transactions in Europe and Carol

Kennedy of Pantheon will present the findings of the Expert Group.

Following the presentations, Club members will break out into table

groups to further discuss the topic. A panel of the UK representatives from

the EU Expert Group will field questions and drive debate.

Background on the European Commission Expert Report on Private

Equity

As part of the public debate on the framework for investment funds,

launched by the European Commission in July 2005, an expert group was

formed earlier this year to look at the private equity industry. The Expert

Group consists of a number of private equity players and practitioners.

The Commission invited the Expert Group to report on how the industry

operates, what are its defining characteristics and whether there are any

European-level regulatory or other obstacles which prevent the efficient

development of the industry in Europe.

The report sets in context the importance of the Private Equity sector in

supporting economic development and job creation, the challenges faced

by the sector in carrying out cross border transactions and the need to

streamline the structures utilised by private equity promoters to avoid

unnecessary tax and regulatory constraints.

Key findings and recommendations of the Expert group are;

• The EU policy makers must consider the specific characteristics of

the private equity sector when reviewing or drafting new legislation.

• For capital gains tax purposes each member state should look

through the private equity vehicle to the ultimate investor to ensure

that tax is suffered only in the home country of the investor.

• Member states should take appropriate steps to codify the mutual

recognition of each other’s fiscally transparent private equity fund

structures.

• Member states should not use the local presence of managers to

claim jurisdiction over capital gains accruing to private equity funds.

• EU institutions and member states should consider establishing,

in non legislative form, a common understanding of the parameters

of ‘private placement’.

A basis for a formal position will be developed after the report has been

given wider scrutiny. The subject was open to debate until September 20,

2006.

Date: Monday 13 November 2006

Topic: EU Expert Report on Private Equity

Time: 4.45pm Registration, meeting commences at 5pm - drinks

until 7pm

Location: 30 Pavilion Road, Knightsbridge SW1X 0HJ

(entrance on Rysbrack Rd)

Private Equity Club 2006EU Expert Report on Private Equity

Brendan is an audit partner within the Channel Islands financial

services group, specialising in Private Equity. Brendan is the Partner

responsible for our Investment Management Industry group in the

Channel Islands. In addition, his responsibilities now include the

coordination of assurance services to the European Private Equity

sector. Over the past 20 years he has advised on the structuring

of retail and private equity funds. He provides audit and advisory

services to Jersey and foreign Limited Partnerships investing globally.

He also co-ordinates the provision of taxation services as required by

the underlying limited partners, a specialist team has been created in

the US to support him in this regard.

Brendan McMahonPartnerPricewaterhouseCoopers

Private Equity Club 2006Your Presenters

Private Equity Club 2006Your presenters

Darren is a tax director, specialising in venture capital and private

equity fund structures, although he also advises other alternative

asset managers on fund structure (European infrastructure funds,

mezzanine funds etc). Darren also extensively advises on carried

interest and general partner co-investment tax issues, particularly in

terms of mitigating the risk of employment income tax treatment for UK

holders.

Darren’s major assignments in recent years have been spin outs of

large “in house” principal finance teams to establish stand-alone fund

management businesses; pan-European fund structuring; restructuring

general partner and fund management entities; advising on tax issues

presented by fund raising; using Limited Liability Partnerships in the

private equity context; and implementing European holding structures

for portfolio companies.

Darren DockerDirectorPricewaterhouseCoopers

Carol A. KennedySenior PartnerPantheon Ventures Ltd.

Carol is a Senior Partner at Pantheon which she joined in 1990 and

has worked in the industry since 1983. Pantheon is a global Private

Equity fund of funds provider with over $13bn under management.

Carol is a member of the Expert Group commissioned by the EU to

report on the Private Equity industry. She also currently chairs the

EVCA Awareness Task Force.