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Article by Adrian Odell, Head of Funds, Jersey, Collas
Crill
Innovative Platform Funds can provide a valuable gateway for
funds business between Jersey and India, facilitating both
inward-bound and outward-bound investments connected to India.
The idea of commoditising funds is attractive but not new. For a
long time Umbrella Funds have been established with a single
investment manager providing services to a number of separate funds
formed under one holding vehicle. Umbrella Funds may use largely
standard form documents and the same service providers to achieve
cost efficiencies for all funds on the same platform.
Going one step further, facilitating different investment
managers on the same platform presents a new set of challenges.
Ideally, it requires the regulation of each fund, as opposed to the
Umbrella Fund structure as a whole. This demands a special legal
structure that can further protect the portfolio of each fund from
the potentially diverse or even opposing investment strategies of
different investment fund managers on the same platform. Jersey has
such a structure and is using it to establish Platform Funds which
are either regulated by the Jersey Financial Services Commission or
unregulated, open-ended or closed-ended and, furthermore, capable
of having different investment managers. The funds may be
established in a corporate form or in a limited partnership form,
in either case providing appropriate ring-fencing to protect
investors.
Efficiencies and flexibility
Cost and time efficiencies are achieved on a fund platform by
each fund using the same standard form prospectus, with fund
specific terms reflected in a short appendix. These include the
investment objective, strategy and restrictions of each fund, the
identity of the investment manager, as well as risks associated
with the particular investment. Time periods and amounts for the
various dealing dates, lock-ups, maximum and minimum initial
investment and liquidity terms and so forth are also dealt with in
the appendix.
The standard form documents are drafted in such a way as to
provide structural flexibility for funds of varying levels of
complexity. They may accommodate nearly any Alternative Investment
Fund, including Private Equity, Venture Capital, Hedge Funds,
Property Funds, Film Funds and Art Collection Funds.
Jersey Platform Funds pave the way to a more comprehensive and
thorough set of fund documents for both alternative investment and
other funds. They offer an unbeatable alternative for funds where
structural integrity is paramount, consistency of documentation and
low cost is highly desirable, and a credible jurisdiction is
strongly advisable.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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