Co-Management and Separately Managed Accounts

Structured co-manager arrangements for investment managers seeking to operate within a CIMA-regulated Cayman platform while retaining control over portfolio strategy and performance generation.

Investment managers seeking to launch or manage Cayman Islands-domiciled funds face a fundamental choice: obtain their own CIMA securities investment business license or operate as a sub-advisor under a licensed platform. For many emerging and mid-sized managers—particularly those based outside the Cayman Islands—establishing their own licensed entity involves significant costs (licensing fees, annual CIMA fees, local office requirements, compliance infrastructure, independent board, audits) and operational complexity.Co-manager (or sub-advisor) arrangements provide an alternative: the investment manager delegates portfolio management authority to an external advisor while retaining ultimate regulatory responsibility. The licensed manager (CV5 Capital) serves as the registered CIMA-licensed manager of the fund, while the sub-advisor exercises day-to-day discretionary investment authority under a delegated investment management agreement. This structure enables external managers to access Cayman fund structures without the burden of obtaining and maintaining their own CIMA licenses.

CV5 Capital offers institutional-grade co-manager arrangements for qualified investment professionals. Our platform provides regulatory infrastructure, governance oversight, compliance monitoring, and operational support—allowing portfolio managers to focus on investment strategy and performance generation while operating within a fully regulated Cayman Islands framework.

Our Co-Manager Arrangement Services

Delegated Investment Management Agreements

Comprehensive investment management agreements (IMAs) structured to delegate portfolio management authority from CV5 Capital (as the licensed CIMA-regulated manager) to external sub-advisors. These agreements define investment mandates, authority limits, reporting requirements, fee structures, and termination provisions while ensuring CIMA compliance and regulatory oversight.

CIMA-Regulated Platform Access

Access to CV5 Capital's CIMA-licensed securities investment business license (Category B) providing regulatory infrastructure for managing Cayman Islands exempted funds without requiring external managers to obtain their own Cayman Islands licenses. This includes regulatory standing, annual filings, CIMA relationship management, and compliance with ongoing regulatory obligations.

Institutional Governance and Compliance Framework

Comprehensive governance infrastructure including independent board oversight, compliance monitoring, risk management policies, conflicts of interest management, trade allocation procedures, best execution policies, and regulatory reporting. Ensures institutional-quality operational standards and aligns with allocator due diligence expectations.

Defined Authority Limits and Trading Permissions

Clear delineation of investment authority including asset class permissions, geographic mandates, leverage limits, concentration restrictions, liquidity requirements, derivatives usage, and restricted investments. Trading permissions coordinated with prime brokers, custodians, and executing brokers ensuring seamless operational execution within approved parameters.

Independent Board Oversight

Independent board of directors providing governance oversight, quarterly portfolio reviews, compliance monitoring, performance evaluation, risk assessment, and approval of material changes to investment strategy. Board members include experienced fund directors with expertise in Cayman Islands regulations, institutional governance, and alternative investments.

Structure and Legal Framework

Investment Management Agreement (IMA)

The IMA is the primary legal document governing the relationship between CV5 Capital (as the licensed manager) and the external sub-advisor. Key provisions include:

Investment Mandate: Detailed description of investment strategy, asset classes, geographic focus, risk parameters, and investment restrictions
Discretionary Authority: Grant of discretionary investment authority to the sub-advisor to make investment decisions without prior approval
Authority Limits: Leverage limits, concentration restrictions, derivatives permissions, short selling authority, and illiquid investment thresholds
Reporting Requirements: Portfolio reports, performance attribution, risk metrics, compliance certifications, and material event notifications
Fee Structure: Sub-advisory fees, payment terms, expense allocations, and performance fee arrangements
Termination Provisions: Termination rights, notice periods, transition procedures, and portfolio wind-down protocols

The IMA is drafted by Cayman Islands counsel familiar with CIMA regulations and institutional fund documentation standards.

Fund Offering Documents

The fund's offering memorandum must disclose the co-manager arrangement including:

Identity of CV5 Capital as the registered investment manager and CIMA-licensed entity
Identity of the sub-advisor, key personnel, track record, and investment philosophy
Description of delegated authority and investment discretion granted to the sub-advisor
Oversight mechanisms including board review and compliance monitoring
Termination and transition procedures in the event the sub-advisor is replaced

Service Provider Agreements

Co-manager arrangements require coordination with fund service providers:

Prime Brokers: Trading authorization letters granting sub-advisor access to prime brokerage accounts
Administrators: Data sharing agreements enabling sub-advisor to receive NAV, performance, and investor reporting
Custodians: Investment guidelines and trading permissions aligned with IMA authority limits
Auditors: Coordination on audit procedures, manager representations, and internal control assessments

CIMA Notification and Approval

Under Cayman Islands Securities Investment Business Law (SIBL), licensed managers must notify CIMA of material outsourcing arrangements including delegation of investment management. CV5 Capital coordinates CIMA notifications, provides required documentation (IMA, sub-advisor background checks, compliance policies), and ensures arrangements meet CIMA's outsourcing standards including adequate oversight, termination rights, and business continuity provisions.

Regulatory and Compliance Oversight

Pre-Trade Compliance Monitoring

Investment guidelines and authority limits are programmed into prime broker and custodian systems enabling pre-trade compliance checks:

Restricted securities lists preventing trades in prohibited instruments or issuers
Leverage limits preventing excessive borrowing beyond approved thresholds
Concentration restrictions preventing single position limits from being exceeded
Derivatives permissions restricting certain instrument types or notional exposure levels

Post-Trade Review and Reconciliation

Daily review of trading activity, portfolio positions, risk metrics, and compliance with investment guidelines. Exceptions are escalated to the compliance officer and portfolio manager for remediation. Monthly reconciliation with administrator reports ensures accurate record-keeping and NAV integrity.

Performance and Risk Monitoring

Conflicts of Interest Management

Policies and procedures to identify and manage conflicts of interest including personal trading restrictions for sub-advisor personnel, allocation policies for cross-account trades, soft dollar arrangements, affiliated party transactions, and related party investments. Conflicts are disclosed in offering documents and monitored on an ongoing basis.

Regulatory Reporting Coordination

CV5 Capital coordinates all regulatory filings and disclosures on behalf of the fund including:

CIMA Annual Filings: Annual returns, financial statements, compliance certifications, and regulatory fees
Form PF (if applicable): Coordination with sub-advisor on SEC systemic risk reporting
AIFMD Reporting (if applicable): European reporting obligations for funds marketed to EU investors
Material Event Notifications: CIMA notifications for changes in service providers, strategy, or material terms

Independent Board Oversight

Board Composition and Independence

CV5 Capital funds are governed by independent directors with no affiliation to the sub-advisor ensuring objective oversight:

Experienced Cayman Islands fund directors with expertise in alternative investments, governance, and regulations
No financial or business relationships with the sub-advisor ensuring independence
Professional indemnity insurance and directors' liability coverage
Representation on multiple institutional fund boards providing benchmarking and best practices insight

Quarterly Board Meetings and Portfolio Review

Board meetings held quarterly (minimum) with comprehensive review of:

Performance Review: Returns, risk metrics, attribution analysis, and peer comparisons
Portfolio Composition: Top holdings, sector allocations, geographic exposures, and liquidity profile
Compliance Reports: Guideline breaches, regulatory developments, service provider issues
Service Provider Performance: Administrator, auditor, prime broker, and custodian assessments
Investor Activity: Subscriptions, redemptions, investor concentration, and marketing initiatives

Approval of Material Changes

Board approval required for material changes including strategy modifications, new asset class permissions, changes to investment restrictions, replacement or addition of sub-advisors, modifications to fee structures, and changes to service providers. This ensures investor interests are protected and changes are properly evaluated.

Termination and Replacement of Sub-Advisors

The board has authority to terminate the sub-advisor for cause (breach of IMA, regulatory violations, performance failures, key person departures) or without cause subject to contractual notice periods. Termination procedures include portfolio transition planning, investor notifications, and appointment of replacement managers or orderly fund wind-down.

Benefits of Co-Manager Arrangements

Regulatory Infrastructure Without Licensing Burden

Sub-advisors gain access to CIMA-regulated infrastructure without the cost and complexity of obtaining their own Cayman Islands license. This includes regulatory standing, annual CIMA filings, compliance monitoring, independent board, and ongoing regulatory relationship management—significantly reducing startup costs and ongoing operational overhead.

Faster Time to Market

Launching within an existing platform dramatically accelerates fund launch timelines. While obtaining a new CIMA license can take 4-6 months, co-manager arrangements can be structured and operational within 6-8 weeks enabling faster capital raising and competitive positioning.

Cost Efficiency

Avoiding licensing costs and leveraging shared infrastructure provides significant cost advantages:

No CIMA license application fees or annual license fees
No requirement for dedicated Cayman Islands office or local staff
Shared compliance, legal, and operational infrastructure reducing overhead
Economies of scale for service providers, audit, and regulatory filings

Focus on Investment Management

By delegating regulatory, compliance, and governance responsibilities to CV5 Capital, sub-advisors can focus on core competencies—investment research, portfolio construction, risk management, and performance generation. Operational distractions are minimized enabling portfolio managers to concentrate on generating alpha.

Institutional Credibility

Operating within an established CIMA-regulated platform with independent board oversight and institutional governance provides credibility with allocators, consultants, and institutional investors. The CV5 Capital platform signals professional operations, regulatory compliance, and alignment with institutional due diligence standards.Scalability and Flexibility

Scalability and Flexibility

As funds grow and sub-advisors mature, they have flexibility to transition to their own licensed entity or continue operating within the platform. The co-manager arrangement provides a scalable foundation that can accommodate growth without requiring fundamental structural changes early in the fund's lifecycle.

Eligibility and Due Diligence

Sub-advisors must demonstrate:

Minimum 3-5 years of investment management experience for key portfolio managers
Verifiable track record in the proposed investment strategy
Institutional investment background (prior roles at hedge funds, asset managers, family offices, or institutional investors)
Clear investment philosophy, process, and risk management framework

Regulatory Standing and Licensing

Sub-advisors must maintain good regulatory standing in their home jurisdiction:

SEC registration (if US-based) or equivalent local registration (FCA, MAS, ASIC, etc.)
No regulatory enforcement actions, sanctions, or material violations
Current Form ADV (if US-based) and ongoing compliance program
Professional liability insurance and appropriate risk management policies

Background Checks and References

Comprehensive background checks on key personnel including criminal background searches, regulatory history checks, employment verification, educational verification, and professional references. FINRA BrokerCheck, SEC IAPD, and similar regulatory databases are reviewed. Personal integrity and professional reputation are critical evaluation factors.

Strategy and Risk Assessment

Detailed review of proposed investment strategy including historical performance, risk characteristics, liquidity profile, concentration risks, leverage usage, derivatives strategies, and alignment with disclosed mandate. Strategies must be clearly defined, replicable, and consistent with institutional risk management standards.

Operational Due Diligence

Assessment of operational infrastructure including trading systems, order management, portfolio accounting, compliance monitoring, IT security, business continuity, and key person risk. Sub-advisors must demonstrate adequate operational capabilities to manage fund assets in accordance with institutional standards.

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Why Co-Manager Arrangements Matter

For emerging and mid-sized investment managers, co-manager arrangements provide critical advantages in today's competitive alternative investment landscape:

Capital Efficiency: Avoid $100,000+ in licensing costs and ongoing CIMA fees enabling capital to be deployed to investment activities
Time to Market: Launch within 6-8 weeks vs. 4-6 months for obtaining independent license
Operational Focus: Portfolio managers concentrate on generating alpha rather than regulatory administration
Risk Mitigation: Independent board oversight and compliance monitoring protect investor interests
Institutional Credibility: CIMA-regulated platform signals professional operations to allocators and consultants
Regulatory Expertise: Leverage CV5 Capital's CIMA relationships and regulatory expertise
Scalability: Flexible structure accommodates growth and evolution as funds mature
Best Practices: Access to institutional governance, compliance frameworks, and operational standards

CV5 Capital provides institutional-grade co-manager arrangements enabling qualified investment professionals to launch and scale Cayman Islands funds efficiently.

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