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[2] The decision turns on two issues. First, what is the proper construction of the term “competing leaver”? Second, was Mr Bishop correctly classified as one when he joined BGF?
[3] The factual circumstances are not in dispute. Mr Bishop worked for 3i between 1989 and 2011. He joined it as a trainee investment controller and was steadily promoted to more senior positions. During the course of his employment he acquired a wide range of experience in both types of private equity investment: growth capital and buyouts. In growth capital, the investor injects funds in return for a minority stake in the equity of the investee company. In buyouts, the investor takes a controlling stake in the investee company.
[4] Until 2005, Mr Bishop was involved in the completion of many buyouts. His last role as a dealmaker involved investing £32 million in a company called SLR in 2008. In the same year, he became the first head of the global growth capital portfolio at 3i. In 2009 he became a member of the Growth Leadership Team and the Growth Capital Investment Committee. Mr Dunn, the general counsel and company secretary of 3i, described Mr Bishop as “an experienced and influential investor”. He sat on the boards of various companies in which 3i had made investments.
[6] Mr Bishop tendered his resignation to 3i on 3 May 2011. He joined BGF in June as its Head of Investments. Prior to his departure from 3i, Mr Bishop had meetings with the human resources director and the chief executive. They both told him that he would be classed as a competing leaver and therefore would lose his right to share in future profits from his LPAs. He was very disappointed to receive this information. Following a discussion with his immediate boss a few days earlier, he had understood that he would be entitled to receive his carried interest.
[7] Although the chief executive took the final decision, he acted on Mr Dunn’s advice. Mr Dunn explained that he had little information about BGF at the time, and that he derived his knowledge from its Articles of Association and its “embryonic” website.
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