Amicorp offers Private Label Fund Solutions for Families
A case study with a Family Office with four different family branches creating one fund
Private Label Fund solutions have been utilized by institutional investors and asset managers for some time, but are now increasingly being used by wealthy private clients and families. Private Label Funds are identical, and offer the same protection, as retail funds, but they are designed around the private client’s requirements in terms of type of fund and legal structures. They are seen by many as ideal for private wealth structuring, not least because their existence may not be a matter of public record. The fund can hold a family’s assets including companies, real estate, as well as liquid financial assets.
Families create a customized solution for their specific needs with a consolidated view of their assets
For example, the sub funds of a private fund can have different rights attributable to them. Shares in a liquid financial portfolio can be cashed in, but shares in another sub fund holding the family business may not be disposed of for a set period. With this solution a family can always maintain a consolidated view of their assets, different asset classes can be managed and maintained with different mandates and beneficiaries can have varying levels of participation depending on their shares and classes in the fund.
An added advantage is that many high-net-worth individuals find this structure easier to understand and manage than the more unfamiliar trusts and foundations available to them which some families regard as too restrictive.
Private Label Funds: tailor made investment funds
Amicorp’s Private Label Fund offering
At Amicorp, we provide specialist Private Label Fund solutions. We operate in the well-known jurisdictions for private equity across Europe, Asia, the Caribbean and Africa. We have dedicated service teams with extensive knowledge in their respective jurisdictions and substantial experience in the set-up of Private Label Fund structures with the accompanying fund administration, accounting and corporate management services.
A Global Fund service provider
Amicorp’s Fund Services provides reliable solutions for Private Label funds. Amicorp assists clients with the set up a Private Equity / Private Label fund in respect to the following jurisdictions: British Virgin Islands, Bahamas, Cayman Islands, Chile, Curaçao, Hong Kong, Luxembourg, Malta, Mauritius, Singapore, etc.
Comprehensive Private Label Fund Administration Services
Our global presence and expertise in financial services enables us to offer a broad spectrum of business solutions including NAV calculation, investor services, private equity / private label fund structuring, fund administration and accounting and corporate management.
We are engaged to assist in determining the structure and other details of the fund, in view of the funds specific investment ideas and goals. Advantages and disadvantages of fund jurisdictions are evaluated to ensure that the operation of the fund is as simple as possible, and to avoid regulatory, tax and operational problems. Securities regulations and tax ramifications applicable to the fund’s investors are assessed and addressed in the fund structure.
Amicorp understands that Private Label funds often have complex administration requirements. We also have substantial experience in meeting our clients’ requirements such as multiple closes, non-traditional waterfalls, closed end and limited partnership structures, as well as partner defaults, unseen partner allocations, illiquid securities / non-traditional allocations within general partner entities and tax allocations and partnership closing. We ensure that your fund complies with AIFMD, FATCA and other legislation. This means that you can focus on your fund’s returns, product development and new opportunities.
Fund Set Up and Administration
Our goal is to always create the perfect solution for the specific purpose of the fund in question. Whether choosing the fund’s legal form or drafting the fund documents, every decision is taken with the greatest care and attention, to achieve the long-term objectives of the fund.
- Amicorp’s experienced and well-connected internal lawyers and tax staff can help clients to provide essential information to select the fund domiciliation jurisdiction. We also share with clients our experience in fund structuring.
- We will arrange the required bank accounts, including handle all application documents and coordination of the preferred banks to open the account on behalf of the clients.
- Fund Administration faces the challenges of regulation, valuation, transparency and ever-increasing legal complexity. Overcoming these challenges require both a broad knowledge and a significant amount of expertise. At Amicorp we place at your disposal a wealth of experience and our use of cutting-edge systems to meet specific requirements for any type of fund.
Location and Establishment of Funds
Amicorp is familiar with providing our Private Label solutions from a variety of locations. Luxembourg, Malta, Cayman Islands, Mauritius and Singapore are the five most popular locations in which Ultra High Net Worths and their families choose to establish Private Label Funds.
- A jurisdiction should have good tax treaties with the countries in which the UBOs are interested in acquiring private equity. However, in the absence of double taxation treaties, the Private Equity Vehicle can establish a Special Purpose Vehicle (SPV) which has a double taxation treaty with the country where the Private Equity is acquired.
- Recommended EU fund jurisdictions are: Luxembourg and Malta.
- Recommended non-EU jurisdictions include the Cayman Islands, Mauritius and Singapore.
Case Study: Example of a Family Office with four different family branches creating one fund
Amicorp has addressed the requirements of a Family Office covering 4 different family branches. This Family Office had investment in several real estate projects in which it invested in for diversification reasons. The Family Office wished to consolidate the money from the different family branches into a fund, and then have the fund invest in different real estate projects.
The advantages of making investments into real estate through a fund
Amicorp established that funds provide privacy when acquiring real estate since compliance will be done on the fund itself and not on the family trusts, which will be investing the funds. The fund was able to hire a specialized private equity investment advisor to clearly stipulate strategy, and Amicorp provided its fund administration, allowing for independent valuation of the fund shares so that the different family branches can trust the valuation. The Fund offers a more professional impression which would allow for the fund to attract additional funding from banks or other families in the future if required.
Investment Method and the Real Estate investments
The UBOs are Settlors and/or Beneficiaries of 3 BVI Trusts with each having an underlying International Business Companies (or IBCs). The UBOs are interested in utilizing funds accumulated in the IBC to reinvest in the collective vehicle and, in turn receive regular dividend distributions. The UBOs were interested in acquiring real estate throughout Europe, and in each country where a real estate investment would be made, a local tax adviser was utilized to provide an opinion on how best to acquire and maintain the real estate in a tax efficient manner, in combination with the collective holding vehicle. Amicorp also needed to coordinate the hiring of professionals to maintain the real estate investments as well as arrange for insurances, payments of bills, etc. The total investments made were EUR 200 million.
Decisions criteria for the legal form of the investment
The UBOs had the option to choose between the following legal forms:
Criteria for Fund jurisdiction
The jurisdiction should not be blacklisted, and should have good tax treaties with most European countries in which the UBOs are interested in acquiring real estate. However, in the absence of double taxation treaties, the Real Estate Vehicle was able to establish a Special Purpose Vehicle (SPV) which has a double taxation treaty with the country where the real estate is acquired.
There are advantages with the jurisdiction of the Real Estate being European due to Participation Exemption between the EU member states – and we recommended either Luxembourg or Malta for this particular client.
Our Family Office client opted for a Luxembourg Non-Regulated Fund structure, which also offered the required substance they were looking for.