The Cost Conundrum 

Institutional investors expect institutional infrastructure, but building that infrastructure can be expensive. A traditional fund centre such as the Cayman Islands offers world-class regulatory and financial ecosystems, but the cost of maintaining genuine substance can add significant pressure to a fund’s margins. 
Read more: How To Choose The Right Home For Your Fund 
Increasing regulatory complexity is also something to note, as highlighted by KPMG’s 2025 Evolving Asset Management Regulation Report – it’s yet another major source of operational and compliance pressure for global asset managers. 
At the same time, managers are already facing a profitability squeeze. PwC’s most recent Asset and Wealth Management Revolution report  shows that while industry assets continue to grow, profit per dollar of assets under management has been declining – a trend that’s expected to continue. 
For GPs, every unnecessary layer of administration is ultimately eating into the economics of the fund.

Don’t Fake Substance 
Economic substance should never simply be a box-ticking exercise. A registered address and a nominal local director may satisfy basic requirements, but increasingly sophisticated LPs want to see genuine governance – they want people who understand the business and they want independent oversight. They also want evidence that important decisions are actually being made where the fund says they’re being made. 
Operational due diligence frameworks such as those used by institutional investment firms scrutinise the independence of governance, segregation of duties, and the quality of local service providers. Fail that test, and an allocator may demand changes to the fund’s governance structure before committing capital – potentially delaying a transaction for months. 
For a GP trying to close a fundraise, that’s a very expensive problem to discover late in the game…

The Mauritius Alternative 

This is where Mauritius becomes interesting. The island offers fund managers a way to build the kind of credible local presence that institutional LPs increasingly expect, without necessarily taking on the cost base associated with some of the traditional financial centres. 
A properly structured Mauritius vehicle can incorporate physical office space, resident directors and genuine local governance, creating the operational substance required for serious institutional due diligence. There are financial advantages, too. Mauritius has a headline corporate tax rate of 15%, while qualifying structures can benefit from an 80% Partial Exemption Regime. According to PwC, this can result in an effective tax rate of 3% for qualifying income. 
But the real attraction isn’t simply tax; it’s efficiency. Done properly, the Mauritius structure allows a fund manager to present institutional investors with a credible governance and operating framework, while keeping unnecessary administrative drag under control. 

Make the Back Office Work Harder 

Technology can make a genuine difference by helping modern fund managers to set up better systems and governance. Automating fund accounting, investor reporting, compliance, portfolio monitoring and document management can reduce manual intervention, improve data accuracy and give both managers and investors greater visibility. 
Basically, the available tech can help build an operation that is easier to audit and easier to scale.   
Adansonia Management Services has been helping fund managers set up shop in Mauritius for years. They provide the local expertise and infrastructure needed to establish a credible presence on the island – including experienced resident directors who participate in governance – as well as dedicated office facilities.  
And through its position within the Linnovate Group, Adansonia also adds that important technological advantage: Linnovate’s cloud-based platform brings fund accounting, investor reporting, compliance, portfolio monitoring and document management into an integrated digital environment, reducing manual administration while improving visibility and control. 
Because in today’s market, your back office isn’t something that investors discover after they’ve said yes – it’s part of the reason they say yes in the first place.