The Problem Statement
A sponsor has built up a successful shipping business with several vessels that he leases commercially. He had a pool of potential investors that are interested in becoming shareholders in the company. The sponsor wanted to contribute his vessels as seed assets to the fund to create a shipping private equity fund.
The sponsor also wished to maintain some level of input and contribute to the fund’s progress due to his intimate knowledge of the shipping industry. This was also very important to the investors who viewed the sponsor as a critical factor to the ongoing success of the business.
The Solution
Amicorp’s capital markets team proposed setting up a Variable Capital Company (“VCC”) fund umbrella with a sub-fund.
The VCC structure was created with our licensed Amicorp Singapore fund management team taking on the role of fund manager, and Amicorp corporate services and Amicorp fund services providing the corporate secretary and fund administration, respectively. All three are required to be Singapore based which we are uniquely positioned to provide.
The flexibility of the VCC structure meant that the sponsor could contribute real assets (in this case shipping vessels) into the fund. Investors could now participate in a highly lucrative private equity investment that would grow significantly over time.
Investors were reassured because the licensed fund manager could independently calculate the value of the fund and could assess the business’ ongoing financials.
The sponsor and investors were also satisfied because the sponsor could take a seat on the fund’s board and contribute to the success of the private equity fund.
Finding out more about VCC funds?
Singapore VCCs funds can be structured as a standalone, sub fund or an umbrella entity, under which multiple ring-fenced sub-funds can be set up and managed by a licensed fund manager. They provide a flexible and efficient vehicle for investors looking to build or diversify their investments by streamlining management and operational processes that can reduce costs and manage regulatory requirements.
With VCC fund licenses in place in Mauritius and Singapore, our team can offer end-to-end support to help you set up a tailored investment vehicle to suit your needs, from fund set-up and administration, to ongoing fund management and broker-execution services. Get in touch with the team here to find out more.
