Irish Investment Funds
Investment Limited Partnership (Amendment) Bill 2019 Published
An Investment Limited Partnership (“ILP”) is a common law partnership structure in Ireland, that does not have a separate legal personality. An asset manager may use the ILP to house a regulated AIF with a focus on investment strategies such as credit, private equity, sustainable finance and real estate.

On 20 June 2019, the Irish Government published the Investment Limited Partnership (Amendment) Bill 2019, which proposes to reform and modernise Irish legislation regulating investment limited partnerships. Second Stage of the Investment Limited Partnerships (Amendment) Bill 2019 was completed on 18 September 2019.

The reform of partnership legislation is designed to bring ILPs into line with other fund structures, to clarify the rights and obligations of investors and amend provisions of previous Act which require updating as a result of the application of AIFMD and other investment fund legislation.

This reform of Irish investment limited partnership legislation will make Ireland an attractive domicile for the establishment of regulated partnerships.

As mentioned by Minister of State Michael D’Arcy TD:

Enhancing the Investment Limited Partnership structure is a key deliverable of the Ireland for Finance Strategy.

The Investment Limited Partnership (Amendment) Bill will further support Ireland’s offering as a top-tier global location of choice for financial services investments as laid out in the Ireland for Finance Strategy.

The limited partnership structure is used in the EU and around the world for venture capital, private equity and other ‘real economy’ investing by investment funds.

The Investment Limited Partnership (Amendment) Bill will allow Ireland to compete for global private equity investment, with the aim of creating employment and securing Ireland’s reputation as a reputable and attractive location for the funds industry, which is subject to a robust and transparent regulatory regime.

What is an ILP?

The ILP is a regulated common law partnership structure, tailored specifically for Irish investment funds. The ILP is established on receiving authorisation by the Central Bank of Ireland (Central Bank) and is constituted pursuant to a limited partnership agreement (LPA) entered into by one or more general partner(s) (GPs), who manage the business of the partnership on the one hand, and any number of limited partners (LPs) on the other hand.

Uses of an Irish Limited Partnership

Due to the advantages noted above, limited partnerships are widely used in the alternative investments sector and are particularly attractive to the private equity sector. The US private equity market has a long-established history of investing through Delaware and Cayman limited partnership structures and in more recent times, it has moved to set up regulated structures in the European Union to secure access to the European market.


Typical to common law partnerships, the GP is the operative legal entity, responsible for managing the business of the ILP and is ultimately liable for the debts and obligations of the ILP to the extent the ILP does not have sufficient assets. The GP must: (i) be authorised by the Central Bank to act as a GP; or (ii) avail of the right to manage an Irish alternative investment fund (AIF) on a cross-border basis under the Alternative Investment Fund Managers Directive (AIFMD).

There are no restrictions on the number of LPs that may be admitted to an ILP. The liability of a LP for the debts and obligations of the ILP is limited to the value of their capital contributed or undertaken to be contributed, except where it becomes involved in conducting the business of the ILP. The ILP legislation helpfully includes a non-exhaustive list of 'safe harbour' activities that can be carried out by limited partners without being deemed involved in conducting the business of the ILP. This safe harbour list provides additional legal certainty when considering Irish ILPs.
All of the assets and liabilities of an ILP belong jointly to the partners in the proportions agreed in the LPA. Similarly, the profits are directly owned by the partners also in the proportions agreed in the LPA.

Key Features of the ILP
Basic Legal Structure

Common law partnership structure with one or more general partners and at least one limited partner formed through a limited partnership agreement (“LPA”). There is no maximum number of limited partners.

General Partner (“GP”)

The GP is responsible for managing the business of the partnership and, as an ILP does not have power to enter contracts in its own name, the GP usually enters into contracts on its behalf. The GP is also liable for the ILP’s debts and obligations.


The limited partners of a QIAIF ILP must meet ‘qualifying investor’ criteria (i.e. an investor who is a professional client under MiFID or an investor with the appropriate expertise, experience and knowledge to adequately understand the investment).

Investor Liability

All investors subscribe to the limited partnership as limited partners and will not be liable for the debts or obligations of the ILP beyond the amount of capital contributed or undertaken to be contributed to the ILP (unless they engage in the management of the ILP, in which case they risk losing their limited liability).

Minimum initial commitment

€100,000, for a QIAIF ILP.

Investment restrictions

A QIAIF ILP has no material investment restrictions and no borrowing or leverage limits (subject to making clear investor disclosures).

Diversification requirements


Service Providers

An AIFM (which may passport its management licence into Ireland) and an Ireland-based General Partner (with two Irish resident directors), depositary, administrator, auditor and legal adviser.

Delegation to non-EEA investment manager

An AIFM of an ILP may delegate portfolio management and/or risk management to a non-EEA investment manager, in accordance with AIFMD.

AIFMD marketing passport

An authorised AIFM that manages an ILP is capable of using the AIFMD marketing passport to sell ILP interests throughout the EEA, except where the ILP is a feeder fund to a non-EEA AIF.


Provided all service providers and directors are approved in advance by the Central Bank, and material ILP documentation is agreed, the ILP may use the Central Bank’s 24-hour authorisation process.


As a collective investment undertaking, an ILP is not subject to tax at the level of the investment fund on income, gains or dividend payments to non-Irish investors. Tax transparent for tax purposes in Ireland. The ILP can elect in the U.S. to “check the box” to be treated as a corporate (i.e. tax transparent globally but corporate in the U.S.).

Some legislative changes in the Bill

The Bill proposes the following main legislative changes to the ILP in Ireland:

Extension of Safe Harbours

The list of activities which, if undertaken by a limited partner, will be deemed not to be taking part in the conduct of the business and so do not result in loss of liability for a limited partner, is being extended to permit a limited partner to participate on advisory committees related to an ILP, vote on changes to the LPA and engage in other related activities.

Alternative Foreign Name

Inclusion of the power to register an alternative foreign name in order to facilitate an ILP operating in a non-English speaking jurisdiction to have official recognition of a translated name in that jurisdiction.

Amendment of the LPA

Removal of requirement for all partners to consent in writing to amendment of the LPA. Replaced by provision, to be contained in the LPA, for amendment of the LPA: (i) where agreed by the majority of partners; and (ii) providing for the ability to make changes to the LPA if the depositary certifies that the proposed amendments do not prejudice the interests of limited partners and certain other requirements are fulfilled.


Creation of a statutory transfer of assets and liabilities on the admission or replacement of a GP, so that all rights or property of the ILP shall vest in the incoming partner or existing GPs. Seeks to simply the administrative process of changing GPs.

Umbrella ILP

Inclusion of the ability to establish an umbrella ILP with segregated liability between its sub-funds.

LSC final comments

We anticipate that, once adopted, the amending Act will, in addition to the above, provide for certain other changes which will strengthen the operation of an ILP. These changes may include the ability to migrate a partnership into and out of Ireland on a statutory basis.

The Bill is an important element of Ireland’s strategy to develop its international financial services sector and to take advantage of the growth in non-bank finance in the E.U. The Bill moved to the third stage of the legislative process in Ireland on 18 September 2019, and we will keep you updated on its progress.

LSC & Partners provides sound technical and business orientated advice and support to clients seeking to negotiate the increasingly diverse and dynamic world of financial services regulation. Contact details for individual team members can be found here.

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