Transfer Pricing for
Private Equity Firms

Explore Transfer Pricing for Private Equity

Quickly navigate to the topics most relevant to you, from key transfer pricing considerations to support throughout the private equity deal cycle.

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Protecting value throughout the investment lifecycle

Transfer pricing can have a direct impact on deal value, investment returns and tax risk.

For private equity firms, transfer pricing considerations arise throughout the entire investment lifecycle. From acquisition financing and due diligence to management fees, operational support and post-deal integration, intercompany arrangements need to reflect where value is actually created.

Quantera Global helps private equity firms and their portfolio companies identify, manage and document these transfer pricing considerations. By addressing transfer pricing early in the deal cycle, we help reduce uncertainty, prevent tax leakage and build structures that remain defensible as the investment develops.

Why transfer pricing matters for private equity

Private equity structures combine investment funds, management entities, acquisition vehicles and portfolio companies, often across multiple jurisdictions.

This creates a range of related-party transactions that can attract scrutiny from tax authorities.

At the same time, tax authorities increasingly look beyond contractual arrangements. They want to understand the economic substance of a structure: where key decisions are made, which entities perform the important functions, where risks are controlled and whether the resulting remuneration reflects those activities.

A transfer pricing framework that does not match this economic reality can create additional tax exposure, complicate an acquisition or exit, and ultimately affect investment returns.

That makes transfer pricing more than a compliance exercise. It is an important part of protecting value throughout the investment lifecycle.

Key transfer pricing considerations for private equity firms

Intra-group financing

Debt is a fundamental part of many private equity acquisitions. Where financing is provided between related parties, both the amount of debt and the interest rate need to be supportable from an arm’s length perspective.

We help assess and document intercompany financing arrangements, including debt capacity, interest rates, terms and conditions, and the economic circumstances of the borrower.

This becomes particularly important when the financial position of a portfolio company changes or a business becomes distressed.

Management and advisory fees

Management companies and other entities within a private equity structure may provide investment management, strategic, operational or advisory services.

The remuneration for these activities needs to reflect the functions performed, risks assumed and value created by the relevant entities.

We help private equity firms determine and support appropriate remuneration for management, sub-management and advisory activities.

Transaction and origination fees

Acquisitions can generate significant transaction-related activities across the private equity structure.

Deal origination, capital raising, execution and transaction support may involve different entities and teams across jurisdictions. Transfer pricing determines how the associated fees and costs should be allocated and which entities should receive the related remuneration.

Monitoring and operational support

Private equity firms often play an active role in monitoring and improving portfolio companies after an acquisition.

Where portfolio companies receive strategic, operational or specialist support from related parties, the nature of those activities and the appropriate arm’s length remuneration need to be established.

We help distinguish shareholder activities from chargeable services and develop pricing approaches that can be consistently applied across the portfolio.

People, substance and decision-making

The location of key people can have significant transfer pricing implications.

Investment professionals, management teams and other key decision-makers may operate across multiple jurisdictions. This can affect where important functions are considered to be performed and may also create wider tax considerations.

We help align transfer pricing policies with the actual conduct, responsibilities and location of key personnel.

Intellectual property

Private equity firms are increasingly developing proprietary technology, processes, data and other intellectual property to support deal sourcing, investment management and portfolio monitoring.

Where this IP is developed, owned or used across jurisdictions, it is important to establish which entities perform the relevant development, enhancement, maintenance, protection and exploitation activities and how they should be remunerated.

Transfer pricing across the private equity deal cycle

Transfer pricing should not start after an acquisition has been completed.

Considering it throughout the deal cycle allows potential exposures to be identified earlier and provides greater certainty around the economics of the investment.

1. Due diligence

Before completing an acquisition, we can review the target’s existing transfer pricing arrangements and identify exposures that could affect the transaction.

This may include reviewing:

• Existing intercompany transactions and transfer pricing policies
• Historical transfer pricing documentation
• Intercompany financing
• Management and service arrangements
• Tax authority disputes or potential exposures
• Whether contractual arrangements reflect actual conduct
• Potential transfer pricing liabilities that may affect deal value

Identifying these issues before closing can support better-informed investment decisions and reduce the risk of unexpected exposures after acquisition.

2. Deal structuring

Transfer pricing should be considered alongside the proposed operating and financing structure.

We help determine how key transactions should be structured and priced from the outset, including financing arrangements, management activities, operational services and other related-party transactions.

The objective is to establish a commercially appropriate and defensible framework that supports the investment strategy.

3. First 100 days

Once an acquisition is completed, transfer pricing policies need to work in practice.

We help integrate the portfolio company into the wider transfer pricing framework and translate the agreed structure into operational processes.

This can include:

• Implementing intercompany agreements
• Establishing appropriate pricing mechanisms
• Aligning policies with actual functions and responsibilities
• Setting up management and service charges
• Reviewing financing arrangements
• Establishing documentation requirements
• Providing practical guidance to finance and management teams

A structured 100-day transfer pricing plan can help ensure that important issues are addressed before temporary arrangements become permanent practice.

4. Holding period

Businesses change after acquisition.

Responsibilities shift, new services are introduced, financing changes and portfolio companies expand internationally. Transfer pricing policies therefore need to evolve alongside the business.

We can periodically review whether the transfer pricing framework continues to reflect the economic reality of the investment and support implementation across multiple portfolio companies.

5. Exit

Transfer pricing can become particularly visible during an exit.

A potential buyer may review historical transfer pricing positions as part of its tax due diligence. Unsupported policies, inconsistent implementation or missing documentation can create uncertainty and potentially influence negotiations.

Preparing in advance helps ensure that the transfer pricing position is clear, documented and defensible before entering the sale process.

How Quantera Global can help

Our transfer pricing specialists support private equity firms and portfolio companies throughout the entire investment lifecycle.

Transfer pricing due diligence
Identify potential transfer pricing exposures before an acquisition and assess their potential impact on the transaction.

Transfer pricing health checks
Review existing structures, transactions, policies and documentation to identify gaps and areas of risk.

Value chain and functional analysis
Determine where key functions are performed, risks are controlled and value is created across the fund, management and portfolio structure.

Transfer pricing policy design
Develop practical and sustainable transfer pricing policies for financing, management services, monitoring, advisory activities and other intercompany transactions.

Financial transactions
Analyse and support intercompany loans, interest rates and other related-party financing arrangements.

Benchmarking
Perform economic analyses to establish and support arm’s length pricing for relevant intercompany transactions.

Transfer pricing documentation
Prepare robust documentation to support the transfer pricing position and meet applicable local requirements.

Implementation and operational transfer pricing
Translate transfer pricing policies into processes that finance and management teams can consistently apply in practice.

100-day plans
Develop a practical transfer pricing roadmap for newly acquired portfolio companies and support implementation immediately following the transaction.

Exit preparation
Review historical transfer pricing positions and address potential issues before they emerge during buyer due diligence.

One transfer pricing partner across your portfolio

Private equity investments rarely stop at one jurisdiction.

Quantera Global combines specialist transfer pricing expertise with an international network of local experts. This allows private equity firms to coordinate transfer pricing matters across funds, management entities and portfolio companies while taking local requirements into account.

Instead of approaching transfer pricing separately in every country or for every portfolio company, we can help create a consistent framework that can be adapted and implemented across the investment structure.

This provides greater consistency, clearer governance and a more efficient approach as the portfolio develops.

Protect value before transfer pricing becomes an issue

Transfer pricing risks are easier to address before a transaction, structure or policy has been implemented than after questions arise during an audit, due diligence process or exit.

Whether you are evaluating a new acquisition, reviewing an existing portfolio company or preparing an investment for sale, our transfer pricing specialists can help you understand the potential risks and develop a practical approach.

Want to know more?

Get in touch

Adriaan van der Heijden

Partner