a multi-jurisdictional group of companies, providing investment fund formation, administration & valuation services.
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September 21st 2010

Fund administrator ifina has launched a new umbrella fund platform.

Derek Adler

A new umbrella fund platform aimed at start-up situations or emerging investment managers.

The Primary Development Fund Ltd. will enable managers with very low assets under management to establish a fund without many of the costs associated with a standalone fund. Assets of $1- $10 million would be ideal for this product although by no means capped at this level.

ifina is able to offer this service from several jurisdictions depending on the needs of the investment manager/sponsor. The product will provide managers with administration, auditing, director and legal services as part of a complete package competitively priced.

The biggest problem for emerging managers is that normal operational costs can deter managers considering the launch of their own fund, due to a lack of initial seed capital. Even once the fund has been launched, delays in raising further assets can also hamper the success of the fund.

All the manager needs to decide, is the choice of jurisdiction and ifina will organize everything else from then on. A fund(s) will be established as a segregated sub-fund(s) of Primary Development Fund Ltd. Managers will be charged approximately 50% of the normal rate for establishing the fund and will also have the advantage of reduced fees across the board, due to economies of scale.

This in no way prevents the sub-fund launching in its own right and breaking away from the umbrella structure at some future date. Therefore, not only are there substantial savings at the outset and with the ongoing charges thereafter but there is also flexibility to convert to a standalone fund in the future. The Primary Development Fund Ltd. and its low cost basis provide the manager an opportunity to build a track record whilst the fund becomes established, thus enabling further capital to be raised . This process also minimizes the problem of major investors wishing to invest only in well established funds.

ifina is by no means new in offering a service such as this. Several years ago a product was developed and promoted called Trader Concept and following its launch, became extremely popular and successful with ifinas’ clients. Primary Development Fund Ltd. takes the concept to a much higher level of quality due to its greater sophistication and professional design.

This exciting new service will be offered to clients on a global basis and whilst available in a number of regulated jurisdictions, the initial focus will be in the Caymans for sound reasons, although a BVI structure is already underway for a major banking client who sees this as an innovative service that they can offer to their clients. Other jurisdictions such as Malta are also available but more expensive and additionally with some restrictions. The advantage of the Caymans is that this service can be offered to managers who have not yet become regulated for whatever reason and therefore the conditions for this product are extremely favourable for the genuine investment manager striving to expand.

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