Our Fund Platform team advises investment managers, administrators, compliance advisers and other financial service providers on establishing and operating Cayman fund platforms.
Fund platforms offer a framework for a newly formed manager to gain access to the operational oversight, administration and compliance services and market experience of an existing fund structure on cost-effective terms. The fund platform is a useful first step to newly emerging managers who want to share the operational, administration and compliance cost burden with other emerging managers as they build out a private equity or hedge fund which can then be developed into a fully independent fund structure tailored to the specific needs of its manager and investors.
The Cayman exempted segregated portfolio company is a highly effective fund platform structure. Many of these companies have been established and are currently operated by the leading international administrators, fiduciary services providers and compliance advisers.
For new fund platform structures, we assist in their formation, regulation and ongoing operation to ensure maximum flexibility for client sub-mangers. Where an emerging manager is seeking to join an existing fund platform structure, we focus on providing a comprehensive review of the fund’s constitutional and offering terms. Key considerations include ensuring that the platform is a good fit with the manager’s product and provides for an efficient exit when the time is right to establish a bespoke fund vehicle for the manager and their investors. Once the sub-fund has attained sufficient capital to justify a separation from the fund platform structure, we advise on the establishment and operation of the new fund and on the exit terms from the platform.
Our service covers advising on the key terms of a fund platform, including: the segregation of assets and liabilities of each segregated portfolio; fee terms for the sub-mangers and each of the key service providers; and Cayman legal and regulatory requirements. We advise on the key terms of an emerging manager’s segregated portfolio within a fund platform, including: management and performance fee terms; allocations; hurdles and high-watermarks; subscription and redemption charges; liquidity terms; lock-ups; gating provisions; suspensions; key man provisions; side pockets; synthetic side pockets; and Cayman regulation of hedge funds.