On 16 November 2012 the High Court delivered judgment in a case in which 22 pension and investment funds were seeking to recover money from the General Partner and the Manager of a Henderson infrastructure fund established as a limited partnership structure to invest in private finance initiative ("PFI") and public private partnership ("PPP") companies. Each claimant was a limited partner in the fund.
It was alleged that the General Partner and Manager, who were two separate but affiliated companies, had exceeded their mandate to invest primarily in PFI concession companies when they used the fund's capital to acquire John Laing plc, a public company that owned a portfolio of PFI concession companies but also owned transport and construction companies, in 2006. The Court had been asked to adjudicate 10 preliminary issues by the parties.
While the Court's preliminary findings indicated that the defendants were not in breach of their mandate, the case is a significant one in that it confirms that derivative actions may be brought by minority members of a partnership against external bodies, such as fund managers. It also highlights the practical and legal risks of doing so, including potential forfeiture of the claimants' limited liability if they pursued the Manager. The claimants may appeal the decision.