Alex Davies
- Partner
- Family & Divorce
Divorce, private equity and fairness: what the Court decided in ED v AP (2025)
Can future bonuses, carried interest and private‑equity rewards be shared on divorce? A recent High Court family case shows how the English court approaches this question in high‑value cases.
The case in brief
- A couple divorced after a long marriage of nearly 30 years.
- The wife had been a full time homemaker throughout the marriage.
- The husband was a senior figure in private equity, with complex remuneration including carried interest, co investments and deferred rewards.
- Their wealth ran into tens of millions, much of it tied up in future or contingent payments.
The court was asked to decide how to divide:
- assets that exist now, and
- assets that might be received in the future, depending on performance and continued work.
Step 1: Assets you have today
The judge grouped together assets which were either liquid or which, if illiquid, were able to be valued in a conventional sense.
The court started with the basics.
- The family home (worth just under £7 million) was transferred to the wife rather than being sold, the judge concluding that the husband would have sufficient capital elsewhere to be able to meet his need to purchase a home for himself.
- The husband paid a lump sum of around £3.4 million to achieve equality of assets the couple had today.
The result: Each party left with broadly the same capital now, reflecting the long marriage and equal partnership.
Step 2: Assets you might receive in the future
This is where the case becomes particularly important. The husband’s private‑equity rewards included:
- carried interest from multiple funds,
- bonus‑style allocations, and
- rights that would only pay out years later (if at all).
The court drew a clear distinction:
Shared
Where future rewards were largely generated by work done during the marriage, the wife was entitled to share them — even if the money had not yet been paid.
Not shared (or shared less)
Where value depended heavily on work done after separation, the wife’s share was reduced or excluded.
Instead of using a rigid formula, the judge, bore in mind a mathematical approach taken in previous similar cases, but took a fairness‑based approach, looking at:
- when the fund was created,
- how much work was done before and after separation, and
- whether the reward depended on ongoing performance.
The result was a tailored split, with some future payments shared 50:50, others at a lower percentage, and some not at all.
What about debt linked to bonuses?
The husband had taken a very large loan from his employer, expected to be repaid from future bonuses. The court decided:
- existing cash could not be ring‑fenced to cover the loan, but
- the wife should contribute a fair share of any future repayment (35% in these circumstances), reflecting the benefits she might receive.
- to make this safe, the court required the wife to offer security against family home she was retaining.
The key message from this case
- This case shows that the English court:
– Treats marriage as a true financial partnership
– Will share complex and future‑facing wealth where it is earned during the marriage
– Recognises that post‑separation effort matters
– Aims for overall fairness, not box‑ticking formulas
- There is no “one size fits all” answer — outcomes depend on timing, contribution and structure.
How we can help
Divorces involving private equity, carried interest and deferred rewards require specialist advice across family law, tax and complex remuneration structures.
Wedlake Bell regularly advises private equity professionals, spouses and high‑net‑worth families on how present and future wealth is treated on divorce. Our Family team is expert at the analysis of carried interest, co‑investments, deferred bonuses and employer loans, and to distinguish marital wealth from post‑separation endeavour.
We focus on achieving fair, practical outcomes — structuring solutions that reflect future risk, performance‑based rewards and long‑term financial security. Please contact us for further information.
This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.
Meet the team: