BVI introduces ‘Incubator’ and ‘Approved’ Funds products

The British Virgin Islands has taken steps to enhance its product offering in the investment business sector by creating two new fund products.

The “incubator fund” and the “approved fund” are two new lightly regulated fund products which are primarily aimed at start-up emerging managers and those managing funds for friends and family/non-institutional offerings.

The Securities and Investment Business (Incubator and Approved Funds) Regulations 2015 (the Regulations) were gazetted on 18 May 2015 and are expected to be brought into force shortly.

The incubator fund is aimed at managers who do not necessarily have the benefit of seed investor capital but who wish to set up quickly and establish a track record with minimal set-up costs and without having to comply with onerous regulatory obligations. The product is therefore expected to be very attractive to start-up managers who are seeking the best environment to grow their assets under management in the most cost-efficient manner.

The approved fund is aimed at managers who wish to establish a fund for a longer term, but on the basis of a more private investor offering, which may appeal to family offices or an investor base of close connections.

Both of these new fund products are able to commence trading within two business days of lodging the application for approval with the Commission meaning almost immediate time to market.

It is anticipated that the establishment costs for the new products will be lower than those associated with setting up a private or professional fund. On an ongoing basis significant savings will also be realized as the funds will have the option to only appoint the service providers that the manager strictly believes the fund requires. Although it should be noted that an approved fund will be mandated to appoint an Administrator.

The introduction of these two new funds products is a welcome development for the BVI’s funds industry and demonstrates the ongoing commitment to the growth of international financial services offered in the BVI.

Should you require any further information or assistance in relation to these products, please feel free to contact one of our Directors at your convenience;
William Harris - william@folioadmin.com
Calum McKenzie - calum@folioadmin.com
Daniel Cann - daniel@folioadmin.com