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Types of Funds

 


Professional Funds

A professional fund is defined in SIBA as a mutual fund where the shares are made available only to professional investors; and the initial investment by each such investor in the fund is not less than US$100,000, or its equivalent in any other currency.


Private Funds

Private funds are defined in SIBA as a mutual fund where the constitutional documents of which specify that it will have no more than fifty investors; or the constitutional documents of which specify that the making of an invitation to subscribe for or purchase shares issued by the mutual fund is to be made on a private basis.


Public Funds

 A public fund is recognised by the FSC as a public fund, provided that the Commission is satisfied with the following:

  • The fund is a BVI business company or unit trust that is governed by the trust laws of the BVI and has a trustee based in the BVI
  • The fund satisfies the requirements of SIBA and where applicable, the Public Funds Code, 2010 (the "Public Funds Code") with respect to its application
  • The fund will, on registration, be in compliance with SIBA, the Public Funds Code where applicable, and any practice directions issued by the FSC and applicable to the fund
  • The fund's functionaries satisfy the FSC's 'fit and proper’ criteria
  • The fund has, or on registration will have, an independent custodian
  • The fund's name is not undesirable or misleading
  • Registering the fund is not against the public interest

Incubator Funds

The incubator fund is aimed at managers who do not necessarily have the benefit of seed investor capital but who wish to quickly set up and establish a track record with minimal set-up costs and without having to comply with onerous regulatory obligations. The product is very attractive to start-up managers who are seeking the best environment to grow their assets under management in the most cost-efficient manner.

Under the Regulations, the incubator fund is permitted to operate for two years (with the possibility of one additional year) with no functionaries (i.e. administrator, custodian or manager) and no requirement to appoint an auditor, provided it remains within the relevant thresholds applicable to the fund. These thresholds are:

  • A maximum of 20 investors;
  • A minimum initial investment of US $20,000 by each investor; and
  • A cap of US $20 million on the value of investments of the fund.

Approved Funds

The approved fund is aimed at managers who wish to establish a fund for a longer term, but on the basis of a more private investor offering, which may appeal to family offices or an investor base of close connections. It also has relevant thresholds:

  • A maximum of 20 investors at any one time; and
  • A cap of US $100 million on the value of investments of the fund.

It has similar characteristics to the private fund including no minimum initial investment for the investors, but unlike the private fund, the approved fund is not required to appoint an auditor, a manager or a custodian. however, to ensure there is some suitable oversight of the operations of the fund, it is required to appoint an administrator which would be reassuring to potential investors.


More Information

For additional Information on Incubator and Approved Funds click here.