BVI Rolls Out Funds For Start-up Managers, Small Investor Groups

Tom Burroughes

28 May 2015

, the organisation promoting the British Virgin Islands financial services industry, has brought out funds designed for start-up managers and those overseeing funds for small groups of closely connected investors, taking advantage of recent new rules coming into force in the jurisdiction.

The new offerings are the "incubator fund" and the "approved fund", BVI Finance said yesterday in an statement.

The new legislation which governs these products is the Securities and Investment Business (Incubator and Approved Funds) Regulations 2015; the rules accord with the Securities and Investment Business (Amendment) Act 2015, which amends legislation from 2010. The rules were published on 18 May and take effect shortly.

“The new funds are aimed at start-up managers seeking the very best environment in which to optimise the growth of assets under management as well as family offices looking to establish a fund for a longer term, but with a more private investor offer,” BVI Finance said.

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, without having to comply with onerous regulatory obligations. These funds are available for offerings to “sophisticated private investors” only, for a maximum of 20 investors, and incubator fund approval status is limited at two years with a possible 12-month extension at the regulator’s approval.

As far as the approved fund is concerned, it also will have a maximum of 20 investors; the aggregate upper limit on investments is $100 million. There is a fast track to market.

The BVI has more than 2,100 regulated funds domiciled in the territory, making it the second largest funds jurisdiction in the world.