First fund for an emerging manager, launched in fourteen weeks
A two-person investment team with first commitments from both US taxable and non-US investors, and nothing set up at all.
The situation
Two portfolio managers leaving a bigger firm had informal commitments from a US university endowment, two US family offices that pay tax, and a European institution. They needed a fund structure that worked for all of them, and a launch date that matched when the endowment allocates money.
- With such a mix of investors, a single fund would have failed one group or another on tax.
- The management company had to be set up where the team actually lived and worked.
- Getting a prime broker (the bank that executes and finances trades) on board, not the regulator, was what decided the timeline.
- It was a new manager's budget, so nothing unnecessary could be built.
There are two feeders because the investors are taxed differently, not because the strategy needs them.
- Subscriptions
- Each investor goes into the feeder that suits how it's taxed; both feeders invest in the master.
- Fees
- Management and performance fees are charged in the feeders and paid to the manager under the investment management agreement (IMA).
- Compliance
- Yearly accounts audited by a CIMA-approved auditor, the fund's annual return, and FATCA and CRS tax reporting through the administrator.
What we did, step by step
- 01Structure fixed in week one
Checked that the mix of investors genuinely needed a master-feeder, rather than assuming it.
- 02Manager entity placed deliberately
Set up the investment manager where the team actually works, keeping Cayman's fund-manager substance test out of the picture.
- 03Documents drafted in parallel
Worked on the offering memorandum, the fund's articles, the management agreement, the subscription forms and the administration agreement at the same time, not one after another.
- 04Prime broker started first
Started the broker sign-up in week two, because we knew that, not the regulator, would be the slowest part.
- 05Directors and auditor engaged
Registered independent directors and appointed a CIMA-approved auditor ahead of registration.
- 06CIMA registration filed
Registered under the Mutual Funds Act once the directors and the auditor were in place.
- The fund launched in fourteen weeks, in time for the endowment's allocation.
- All three types of investor catered for, with nobody ending up in a tax position they didn't intend.
- The management company placed so that no Cayman substance duties arose on it.
- The launch stayed on budget, with no company or service provider added that wasn't needed.
A founder-run software group with companies in three countries and no holding company above them, nine weeks before signing a sale to a US buyer.
A UK-based family losing the old non-dom tax treatment after April 2025, who needed a family office that genuinely operates in the UAE while their European property kept earning.
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