Problems associated with the management rights of venture capital investors

A US pension scheme investing in a private equity fund, which in turn is investing in a Swiss target company, is able to avoid the stringent administrative and fiduciary obligations imposed by the US Employee Retirement Income Security Act if it is entitled to ‘substantive management rights'. Beat Barthold of Swiss law firm Froriep Renggli discusses the complex legal implications of adopting such a strategy under Swiss law and points out the legal hurdles associated with the enforcement of management rights in Switzerland.