Scenario 1: ‘We’re raising a billion-dollar institutional fund.’

Choose: Cayman Islands

If you’re managing billions of dollars for major pension funds, endowments and institutional investors, Cayman is still the world’s heavyweight champion.

With more than 17,000 registered private funds, and in excess of US$16 trillion in assets under management, it remains the jurisdiction that global allocators know best.

The regulatory costs may be higher, but that simply doesn’t matter at this scale. 

Pros

• Globally recognised by institutional investors
• Long-established legal framework
• Preferred by mega-funds
• Massive ecosystem of legal and financial service providers

Cons

• Increasing regulatory burden
• Higher ongoing compliance costs
• Expensive for smaller managers
• Difficult to justify below roughly US$100 million AUM

Bottom line: If you’re running a global institutional fund, Cayman still deserves its reputation.

Scenario 2: ‘Our investors are mostly in Asia.’

Choose: Singapore

Singapore has become the financial capital of Asia for good reason: it combines political stability, AAA credit rating and an outstanding reputation among family offices, sovereign wealth funds and ultra-high-net-worth investors.

If your LP base is concentrated in Asia, Singapore gives your fund instant credibility, but bear in mind that prestige comes at a cost… To unlock Singapore’s tax advantages, funds must satisfy strict minimum capital requirements. And, if you’re looking to establish a licenced Monetary Authority of Singapore (‘MAS’) Fund Manager, maintaining local economic substance comes with significant ongoing capital input. The alternative is to use a platform manager who is already licenced until you’re at the size and scale where you’re willing to make the substance investment.

Pros

• Exceptional reputation
• Strong appeal for Asian investors
• Excellent legal framework
• Popular Variable Capital Company (VCC) regime

Cons

• High minimum AUM requirements
• Physically resident  directors and office space
• Ongoing operating costs
• May be less attractive for emerging managers – given the cons – unless you’re targeting Asian investors

Bottom line: Singapore makes sense if Asia is your primary market or if you’re looking to raise capital from Asia – and if you have the scale to support it.

Scenario 3: ‘We’re raising a mid-market private equity fund.’

Choose: Mauritius

For many emerging and mid-market managers, Cayman and Singapore have become victims of their own success. Both offer world-class infrastructure, but at world-class prices…

Mauritius takes a different approach: it delivers institutional-grade regulation and international credibility while keeping operating costs significantly lower. Maintaining economic substance – including resident directors and physical office space – typically costs far less than maintaining an equivalent presence in Singapore, for example. 

After all, every rand, dollar or euro saved on administration is another dollar available for investment.

Pros

• Lower operating costs
• Internationally recognised regulatory framework
• Attractive effective tax regime
• Particularly well suited to emerging managers

Cons

• Less familiar than Cayman among some US allocators
• Smaller financial ecosystem

Bottom line: If you’re building rather than, say, inheriting a billion-dollar fund, Mauritius deserves serious consideration.

Scenario 4: ‘We’re investing heavily into Africa.’

Choose: Mauritius

Mauritius has spent decades positioning itself as the gateway between global capital and African investment opportunities. The island’s network of Investment Promotion and Protection Agreements provides an additional layer of legal certainty that can be invaluable when investing in emerging markets.

Instead of viewing Mauritius as simply another offshore jurisdiction, many fund managers increasingly see it as a strategic platform for African investment.

Mauritius has also developed a reputation for relatively rapid fund establishment, with many structures being completed in around three to four weeks. Compare that with significantly longer timelines in some traditional offshore jurisdictions and the difference becomes meaningful.

Read more: 7 Reasons Why Fund Managers Are Choosing Mauritius

So, Which One Should You Choose?

Here’s the simplest way to think about it.

Where Does Adansonia Fit In?

Unlike providers focused on a single market, Adansonia Management Services has established operations in both Mauritius and Singapore, giving fund managers on-the-ground expertise in two of Asia and Africa’s leading financial centres. Adansonia Management Services is uniquely positioned to advise clients on the most appropriate structure for their investment strategy as a whole, not just the jurisdiction it operates in.

Adansonia is part of the Linnovate Group and is able to offer institutional-grade technology to clients, who benefit from Linnovate’s cloud-based platform that integrates fund accounting, investor reporting, compliance, portfolio monitoring and document management into a single system. 

Contact Adansonia Management Services today to discuss your options, and how best to structure and domicile your next investment.