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  • Writer's pictureCV5 Capital

CV5 Capital to launch a fund platform for emerging start-up fund managers

A turnkey solution for launching an offshore fund - leaders in fund formation solutions.

It has become increasingly prohibitive for emerging and start up fund managers to launch an investment fund. Up until this year, emerging managers were encouraged to launch a hedge fund in jurisdictions such as Cayman, with very little, if any regulation or ongoing costs. Until August 7th of this year, a fund could be launched without regulatory oversight or the significant expense drag of appointing multiple service providers provided the fund had 15 or fewer investors, who were capable of removing the operators of the fund i.e. the directors. This would permit a fund manager to keep costs to a minimum and once it had 15 investors, one would expect that the additional regulatory requirements would have less of an impact on the net asset value. However, since August 7th, this has now changed in respect of Cayman hedge funds.

No matter how many investors a fund has or assets under management, a hedge fund is now required to register with the Cayman regulator. The following must also be put in place at launch:

  • Appointment of a fund administrator

  • Appointment of a minimum of two (2) directors who are registered under the Director Registration & Licensing Law, 2014

  • Appointment of AML Officers - independent and experienced persons to act as the Money Laundering Reporting Officer (MLRO), Deputy MLRO and the Anti-Money Laundering Compliance Officer (AMLCO)

  • FACTA/CRS Reporting

  • Register the fund with the regulator and make the appropriate filings plus pay the registration fees and on-going annual fees

  • Take into consideration the banking and custody fees

  • Appointment of an auditor with the requirement to file audited financial statements within 6 months after the financial year end.

As a result, many fund managers have been put off from launching a fund due to the above requirements and additional costs. Moreover, the extensive time taken to structure the operations of a fully regulated fund plus the added time-frame to understand the requirements and perform due diligence on service providers risks a missed opportunity due to a change in the market or investor appetite.

A Turnkey Fund Platform for Fund Managers

As a result, turnkey fund launch solutions are becoming increasingly popular. CV5 Capital is utilizing its expertise in launching and on-going governance support to funds, to provide fund managers with an industry leading solution for launching a Cayman fund with all of the operational, legal, governance, compliance and risk oversight in place. This provides the following benefits:

  • substantial cost savings on legal set up

  • substantial savings with on-going total expense ratio due to negotiated rates with our key service provider partners

  • fund managers can focus on what they do best: (i) managing their strategy; and (ii) raising capital without becoming consumed by compliance

  • enables fund managers to easily add different strategies in the future which are fully segregated. To create a fund range, if so desired.

  • confidence in the fact that the fund is built with a focus on institutional investor due diligence, compliance, corporate governance and meets regulatory requirements

  • Domiciled in the worlds leading jurisdiction for hedge funds - the Cayman Islands

  • Tax Neutral - No Taxes, whatsoever, at the Cayman fund level

  • Speed to Launch - you can launch your fund within 4-6 weeks

  • No restriction on leverage or borrowing

  • No restriction on share classes

  • No restriction on assets traded or the investment strategy

  • Can be open-ended or closed-ended - long only, any hedge fund strategy, hybrid strategy, fund of funds, alternative asset focus, real estate, venture capital, private equity

  • ISIN & CUSIP provided at launch along with all legal documentation

  • Accounts and On-Boarding included

  • Institutional quality service providers already appointed

  • Ability to set up a Cayman investment management company swiftly to compliment your fund offering, if so desired.

We are more than happy to have a free informal discussion, understand your proposed fund and provide an overview of the benefits of our fund platform to see if it meets your requirements. For further information on our turnkey fund platform, please feel free to contact us:

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