BVI Hedge Funds
Types of funds in BVI
There are a number of BVI fund products suited to everyone from the startup manager setting up an incubator fund to established institutional fund managers with billions under management.
The maximum number of investors during this time is 20 and each one must invest at least US$20,000. The incubator fund’s net assets may not exceed US$20 million at any time. At the end of the validity period, the fund must convert to a private, professional or approved fund. Alternatively, if the fund is not deemed viable it must wind down its operations.
To qualify as a private fund, the fund must either have no more than 50 investors or only make a private invitation to subscribe for or purchase fund interests.
Private funds must be recognised by the FSC before they carry on business. A fund will be regarded as having commenced its business when it publishes a prospectus or other document inviting to purchase or subscribe for shares of the fund.
A professional investor is a person:
- whose ordinary business involves the acquisition or disposal of property of the same kind as the property of the fund; or
- who, whether individually or jointly with a spouse, has a net worth in excess of US$1,000,000.
The minimum initial investment for a professional investor must be at least US$100,000. Exempted investors, on the other hand, do not have a required minimum initial investment.
An exempted investor includes:
- the manager, administrator, promoter or underwriter of the fund; or
- any employee of the manager of the fund.
A professional fund may carry on its business or manage or administer its affairs for a period of up to 21 days without being recognised under SIBA.
BVI Incubator and Approved Fund
For many years, a type of closed end structure was used to fill this void, and while those structures may still have their place, the draw back was that they were closed – not in the sense of a limited offering of shares but rather an investor’s right to redeem was restricted. This restriction often caused a manager difficulty in fund raising as even friends and relatives would generally prefer a mechanism to enable them to withdraw their funds on demand if needed or to allow them to vote with their feet if investment strategy was not going to plan.
The Regulations enable Incubator and Approved Funds to be set up and launched on a fast track, cost effective basis with minimal regulatory oversight by the BVI Financial Services Commission. This has proved successful.
Our fund services
Our Business Development Managers will guide you through the whole process – from choosing which jurisdiction is best for you, to obtaining your fund license and day-to-day management.
Our services include:
- Advice and assistance in setting up your offshore fund
- Ongoing support, from day-to-day administration to assistance with corporate, legal and tax matters
- Fund accounting and valuation
- Risk management and compliance services
- Domiciliation and office rental (if required)
- Audit services