In recent years, we’ve been seeing increased interest from Asian managers in combined Cayman Islands and Luxembourg vehicles when targeting both EU and Asian (and potentially U.S.) investors.
While Cayman remains the predominant go-to domicile for Asian managers raising funds through private placement, Luxembourg is an attractive choice when a more global offer – specifically including European investors – is considered.
Of course, there is an increasing array of leading domiciles on the scene for Asian managers to choose from, including Hong Kong, Singapore, Delaware and others depending on where investors are located. However, when it comes to marketing in Europe, managers will often look for a jurisdiction that can take advantage of an EU marketing passport under the Alternative Investment Fund Managers Directive (AIFMD).
In order to overcome regulatory, tax and other differences of jurisdictions where investors are located, use of parallel fund structures may be the appropriate choice rather than a structure domiciled in one jurisdiction only. However, the benefits of opting for such a structure must be weighed up against the additional costs and operational complexities of managing two funds based in different locations.
In a new whitepaper co-produced by IQ-EQ and Ogier, we discuss the nature and benefits of parallel fund structures, explore key considerations when opting for such a structure, and examine Cayman and Luxembourg as jurisdictions of choice for parallel funds.