Bermuda has a long-standing reputation as a high-quality
jurisdiction in which to domicile an offshore fund, whether as a
standalone vehicle or the now-familiar master/feeder structure.
What follows is an overview of some
recent changes, current developments and those anticipated in the
near future, all of which are intended to ensure that this
reputation is preserved.
After collaboration between the Bermuda Government, Bermuda
Monetary Authority (BMA) and industry
stakeholders, a 2013 amendment to the Investment Funds Act 2006
introduced two new classes of exempt funds: the Class A Exempt Fund
(Class A Fund) and Class B Exempt Fund
(Class B Fund).
The defining features of a Class A Fund are light touch
regulation and speed to market. Subject to certain eligibility
requirements (broadly experienced/high value investors with a
manager licensed in a recognised jurisdiction or with $100 million
of assets under management) the fund can be launched immediately
upon filing with the BMA.
If the Class A Fund qualifications surrounding the investment
manager are not met, a Class B Fund may be appropriate. Class B
Funds also benefit from a less onerous regulatory regime, although
an application to the BMA is required.
Bermuda is one of the few jurisdictions where legislation
permits the appointment of managing trustees. A managing trustee,
who may be an investment manager, may be appointed as co-trustee
with another trustee (often referred to as a custodian or
administrative trustee). This enables the trust instrument to
provide the managing trustee with exclusive control over management
of the fund's investments with the administrative trustee not
liable for the acts or omissions of the managing trustee.
When working with family businesses, it's sometimes surprising to see the gap between the founder and the next generation, particularly when the next generation do not see the importance of the business.
Luxembourg ranks as the largest EU fund domicile jurisdiction
and the second largest fund domicile jurisdiction globally.
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