HEDGE AND MUTUAL FUNDS
Dennings (Barristers and Solicitors) will assist our clients in establishing mutual funds or hedge funds in SVG. The incorporation work will be referred to Dennings (Trustees Limited), but we will assist in writing or reviewing the prospectus, provide the directors (if required to do so), draft any ancillary agreements required, and prepare the necessary resolutions recording the activities of the fund.
With regard to funds, the SVG Mutual Funds Act defines three categories of investment fund: (a) Accredited (b) Private and (c) Public. The definitions for each category are as follows:
Accredited Fund: Such a fund must have a minimum subscription requirement for investors of US$ 25,000 or equivalent in any currency. There is no limit to the number of shareholders a fund may have.
Private Fund: Such a fund must only solicit investors on a ‘private’ basis OR the number of total investors must be limited to 50. No invitations to subscribe for or purchase shares in the fund shall be generally circulated, nor shall subscriptions be solicited from members of the public.
Public Fund: Any fund which does not fall into either category above is deemed a Public Fund. As the category suggests, a Public Fund is open to members of the public.
Accredited and Private mutual funds must apply for and be granted ‘recognition’ by the SVG regulators. In order to obtain recognition a fund must comply with all aspects of the Mutual Funds Act as it relates to the classification being applied for. In essence, to obtain recognition a fund must illustrate to the regulators, the following points:
- That the fund is structured correctly to ensure the protection of investors;
- That the Investment Manager/Trading Advisors are experienced and competent;
- That the Offering Memorandum for the fund complies with the Act with regard to full disclosures to investors;
- That the fund will be managed and administered in a fit and proper manner.
Mutual funds may be structured as simple IBC’S, Segregated Cell Companies under the IBC structure, as LLC’s, or as Unit Trusts.