A v M [2021] EWFC 89

Mr Justice Mostyn dealt with the division of carried interest and investments in PE funds in relation to W’s financial remedy application.


  • Mostyn J (“the judge”) dealt with W’s financial remedies application.
  • H was 63. W was 54. Both were US citizens. W’s parents were extremely wealthy, and W was the beneficiary of several valuable trust funds.
  • The parties married in June 1994 and W’s divorce petition was submitted in July 2019. There were 5 children of the marriage (one aged 12 and the remainder in their 20s).
  • The parties owned:
  1. The former matrimonial home (FMH) in London, subject to a mortgage of £3.25 million and an unsecured loan of £4 million owed to one of the trusts.
  2. A New York property worth $2.5 million, subject to a $537,750 mortgage and US CGT.
  3. An Italian property worth €1.36 million.
  4. Spanish property.
  • H worked in the financial sector. In 2015, he founded a private equity fund “X Co”.
  • In October 2016, H and his business partner established Fund 1. Its first close was in March 2017 and its final close was in March 2021, with €178 million invested in businesses. The fund term was eight years from first close. The judge assumed a one-year extension would be taken.
  • In October 2018, H and his business partner established Fund 2. Its first close was in June 2019 and the final close was in December 2020, with €151 million invested in businesses. The judge assumed the term would be nine years from first close.
  • H expected to more than double the value of the investments (forecasting a factor of 2.5 for each fund). If the investments in the funds were only doubled, there would be no “carried investment” (“carry”).
  • W had interests in several valuable trust funds (the total value of the trust funds being in the tens of millions).
  • H and W’s brother in law had also initiated another private equity fund (“Investment II”), investing through a vehicle called L Ltd (“L”). H had borrowed money from L to invest and a debt of €3.12 million was outstanding. The parties were potentially going to jointly foot a £1.8 million loss.
  • Finally, H had a JP Morgan IRA pension.


  • What was W’s share of the carry and investment funds in Funds 1 and 2?
  • How should W’s trust interests be accounted for? (The judge cited Villiers v Villiers [2021] EWFC 23 and summarised the test as “being satisfied, on the balance of probability, that the trustees, having been apprised of all relevant facts, would respond positively to W’s request to make funds available to her” [44].
  • Was W entitled to periodical payments and at what figure? (W sought £225,000 p/a).
  • What was the proper division of the remaining realisable assets?


The Funds

  • Taking the marital acquest as at the trial date, the judge decided that the marital carry in each fund was to be shared equally. He firmly dismissed W’s submission that she was entitled to share in carry H generated after the trial date by virtue of her “contributions to the family” in caring for the parties’ 12-year old [17].
  • The judge also decided that the co-investments in both funds be shared equally. For practical reasons, the judge placed W’s sharing entitlement exclusively in Fund 1. This meant W should receive in 4.5 years’ time - if the 2.5 forecast held good - £6,483,623 in total generating a Duxbury income of £325,000 annually. The carry and investment were to be paid by means of contingent lump sum orders against H.
  • W’s share of the funds equated to a 23:77 split in H’s favour, to reflect the fact that, by the end of each fund, just under half of the work in Fund 1 and two-thirds of the work in Fund 2 would have been done by H alone after the marriage ended.
  • H’s residual PE and VC investments were to be shared equally on a Wells
  • The judge expressly addressed the risk (although “negligible”) of a “perfect storm” where W received nothing from the funds and the £1.8 million loss from Investment II was realised, weighing it in the balance of his remaining disposition. He stated that when exercising the section 25 discretion, the court should be entitled to consider the probability of future events happening or not.

The trusts

  • The judge held that the trustees would “unquestionably” provide bridging finance to W, if she asked for it, for the period until she received her share of the marital carry, (or if the “perfect storm” materialised), to ensure W’s needs were met [48].

Periodical payments

  • The judge dismissed W’s claim for periodical payments. Until 2025, W was to “meet her needs first from her own resources, including her non-marital resources” [53].
  • He did not grant a nominal periodical payments order as an “insurance policy” either, because he was not satisfied that it was more likely than not that W would suffer undue hardship if her periodical payments claim was dismissed [58].


  • W had incurred disproportionately more legal costs (£544,000) than H (£273,000). To ensure that in the final division, H didn’t end up paying half of W’s costs – given how excessive they were – the judge added back a figure of £150,000 to W’s side of the asset schedule.

Remaining assets

  • All the properties were to be sold and divided equally, except the Italian property which was transferred to H. Joint funds and debts were divided equally. H was to pay W a lump sum of £1,807,000. H’s pension was divided equally.
  • Child maintenance was to be ordered in the terms of the parties’ agreement.


  • H had made a reasonable offer at the PTR which W “intransigently rejected” [98]. Reiterating that litigants must “pitch their claims in the area the court might award, and they must engage with bona fide open attempts to settle”, the judge ordered that W was to pay half H’s costs from PTR to the trial’s conclusion (£38,580) [100].