Case study
The client, their challenge
A global investment manager engaged IQ-EQ to help design a compliant evergreen fund enabling sophisticated investors to access medium-term listed securities in India.
The client required a fund vehicle that would:
- Enable ongoing subscriptions, allowing investors to subscribe at any time
- Encourage deferred redemptions, aligning investor behaviour with a medium-term investment strategy
- Remain fully compliant with the Mauritius Financial Services Commission (FSC) framework
Under Mauritius law, Collective Investment Schemes (CIS) must permit redemptions at the request of investors. As a result, redemption restrictions cannot undermine an investor’s statutory right to exit.
However, the fund’s investment strategy relied on investors remaining capitalised for a minimum holding period. This created a clear tension between regulatory redemption rights and the client’s preferred medium-term investment model.
A traditional closed-end fund (CEF) was also unsuitable, as CEFs typically restrict ongoing subscriptions and investor-driven liquidity, both critical requirements for the client’s evergreen strategy.
Our solution
Following a detailed regulatory assessment, we proposed structuring the vehicle as a CIS complemented by an early-redemption charge mechanism.
This principle-based structure:
- Preserves investors’ legal right to redeem at any time, ensuring full FSC compliance
- Introduces an economic disincentive for early redemption, naturally supporting the fund’s medium‑term investment horizon
- Enables continuous subscriptions and capital inflows, essential for a scalable evergreen model
This solution balanced regulatory compliance with commercial objectives, allowing the client to achieve their investment goals without compromising investor rights or structural integrity.
Results
With IQ-EQ as trusted partner, the client successfully launched a hybrid evergreen fund that combines investor flexibility with the discipline required for a medium-term investment outlook.
Today, we continue to support the fund through a comprehensive suite of services, including:
- Fund administration
- Regulatory compliance
- Accounting and reporting
- Tax and legal support
This end-to-end support ensures the vehicle remains fully aligned with FSC requirements throughout its lifecycle while delivering a robust evergreen investment platform.
Looking for similar support? Get in touch to talk about structuring and servicing compliant evergreen funds across international markets.
