Covid-19 And UK Partnership Models

Could partners be ejected?

Sinead O’Callaghan, Partner at Cooke, Young & Keidan, and James Mather, Barrister at Serle Court
Originally published in the April | May 2020 issue

Hedge funds are no doubt facing significant pressures as the Covid-19 pandemic continues to take a toll on the global economy and the value of investments. The worst affected funds may well be looking at whether individual members need to be expelled or retired to ameliorate their financial positions and keep the boat afloat. In contrast, high performers may be considering jumping ship to different funds which appear to be continuing to function well with little risk of insolvency.

This article examines first, the scenarios in which members might find themselves leaving their current funds; and secondly, the potential consequences associated with leaving, including the impact of insolvency.

Expulsion of members

Many funds are no doubt already taking action to identify and address underlying issues affecting specific individuals. In the current climate, this might result from inadequate performance and/or under-delivering, or it might be due to disagreements in relation to the strategy to be adopted with the aim of surviving the current crisis. 

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