The Summary of Events and What to Monitor for EM PE Fund Managers by Owen Lysak, Senior Associate of Clifford Chance: The U.K. voted to leave the E.U. on 23 June.  Legally, nothing has changed yet. The U.K. is still an E.U. member subject to the same rights and obligations. This will not change until actual departure which may not be for some years. However, the U.K. will now have to decide how and when to leave the E.U. The E.U.'s exit clause is Article 50 of the Treaty on the European Union (“TEU”). David Cameron has said that he will not immediately issue the notice to withdraw from the E.U. under Article 50. Instead, he has said that he will step down as Prime Minister and oversee a leadership election with a view to a new Prime Minister being in place by the Conservative Party Conference in Birmingham on 2-5 October this year. It will then be up to the new Prime Minister to engage Article 50 TEU.

The asset management industry faces a period of uncertainty while we wait to see how the U.K./E.U. relationship will look. The critical issues will include the likely loss of passporting rights, which could force changes to the business model for some funds, from changes to marketing approaches to re-domiciling the fund itself. Lower levels of investor appetite for investing into non-E.U. structures may also become relevant for U.K. managed and U.K. located fund structures.