Kapitalfonde i juridisk og økonomisk perspektiv

Mette Bøgh Larsen

Student thesis: Master thesis

Abstract

This thesis is based on the increased focus in recent years on private equity funds and their working process. Focus has primarily been set on the taxation planning of the funds and secondly the media have drawn an unfavourable picture of the funds. The thesis examines the actual facts and relevant circumstances of the private equity funds including their competences and characteristics. The examination is based on the competences which the private equity funds claim to possess. The competences will be illustrated by theories of economics and it will be analyzed to which extent the funds possess competences that are unique and unparalleled, so that it will be possible for them to sustain their position on the market for acquisitions and as an alternative to the common stock market. The analysis will also focus on financial structure, pursuing active ownership, implementation of strategies, and obtaining knowhow of the market and the target companies. Heavy expenses derive from private equity funds’ acquisitions and operation of portfolio companies. The funds would like to deduct these expenses to reduce the taxable income of the group. In the statement of their corporate business control, the Danish tax authorities have described which transactions and costs they focus on in connection with acquisitions of Danish companies by private equity funds. The analysis of the tax consequences will be based on these transactions and costs. In particular, the statement of the Danish tax authorities focus on costs originating from contracting debt and financing acquisitions of portfolio companies and the continued operations thereof. Therefore an analysis is made of the various rules within the field of deductible interest, including the restrictions on tax deductibility of interest expenses which was adopted by the Danish Parliament in 2007 as a part of the so-called Act on Tax Interventions against Private Equity Funds. Furthermore, the possibility of obtaining tax deduction for expenses deriving from acquisitions of target companies and expenses linked to investigations of possible target companies and expenses for the retention of executives etc.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2008
Number of pages102