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Umbrella Fund Structures for Emerging Fund Managers

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A new fund manager is typically interested in to get his fund going in possibly short time and at the lowest cost.

Several fund administrators have set up umbrella structures to offer shorter launch times at a fraction of cost compared to the setup time and cost of a stand-alone fund structure.

Under the umbrella fund structure every new fund is registered as a sub-fund. Such umbrella fund is usually maintained by a fund administrator.

In Bermudas the launch time is 2 weeks and costs USD 5’000, in Malta – 3-4 weeks and EUR 10’000. Typically, the launch time is about 2-3 times faster and setup costs are 2-4 times lower.

In a hindsight, such sub-fund structure may be a viable solution if the management team is unable to pass regulator’s “fit and proper” test.

The ongoing annual costs are about the same or may even exceed the maintenace cost of stand-alone fund structure . The key disadvantage is that the fund manager is tied to one administrator as a service provider.

Some of the service providers offering umbrella fund structures to emerging fund managers are Apex Fund Services (in Bermudas and Malta) and Altarius Asset Management in Malta.

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Written by A.S.

August 13, 2011 at 10:50 pm

One Response

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  1. Just found out about this blog. Our Maltese fund umbrella fund platform is designed to offer full flexibility. our client can choose the administrator, the custodian, the broker, the legal advisor. There is no minimum size required and no lock up.
    Finally, we do not manage any prop. money.
    Independancy and full flexibility is what those platforms need to offer. if you manage to keep costs and timing low, then you have an attractive offer. Next step is to offer a UCITS compliant fund platform, with quasi similar features, to deal with the increasing demand and drastic European regulatory changes… we will be there by year end..
    Pierre MALICZAK
    President
    Altarius Group

    Pierre MALICZAK

    October 18, 2011 at 10:26 am


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