Legal services firm Ogier has released a publication about detailing the steps needed to establish a Cayman Islands open-ended fund.
The briefing note provides an overview of the process and legal considerations connected with establishing an open-ended fund in the region.
The company gives a range of advice, such as how to select and form a vehicle (company, partnership trust), choosing a structure (stand-alone fund or master-feeder), ascertaining if a fund will be a registered mutual fund, and selecting a service provider.
On the type of vecihle to select, the firm states: “There are few Cayman factors that will drive the selection of one vehicle rather than another and the choice is more commonly dictated by onshore tax and regulatory considerations relevant to the investors, the management or the trading strategy.
“For example, hedge funds that are looking to take in US tax-exempt investors will typically be formed as exempted companies, while funds that are to be distributed to certain Japanese investors may be structured as unit trusts.”
The briefing continued: “Where it is important that one portfolio of assets within the investment fund is protected from any liabilities incurred with respect to another portfolio, it is possible to incorporate an exempted company as a segregated portfolio company.
Ogier also gives information on the Cayman Islands regulatory framework, such as the Mutual Funds Law and anti-money laundering legislation in the briefing.
The publication is available on the firm’s website.
Ogier, Open-ended fund, Cayman Islands