"Launching a private fund can be daunting. While choosing a vehicle and raising money are essential components, aligning structure, regulation, and investor expectations are basics that ensure the launch isn't derailed. The first critical step is selecting the vehicle. Would a RAIF or SIF in Luxembourg be ideal? An Exempted Company or Limited Partnership in Cayman? A Qualified Investor Fund (QIF) or Exempt Fund under the DFSA in DIFC? Each vehicle brings different legal forms, liability regimes, and marketing rights."
"In Luxembourg, for example, a Reserved Alternative Investment Fund (RAIF) doesn't require regulatory approval by the CSSF, speeding up time to market, but still must be managed by an authorised AIFM and comply with EU rules. Next is regulatory filing and governance frameworks. In the Cayman Islands, private funds must register under the Private Funds Act within 21 days of accepting capital commitments and before any capital is received. Independent oversight is mandatory, including auditors, administrators, custodians, or equivalents."
"They want clear reporting, independent valuation, and good governance. Firms that provide external oversight, audited accounts, and consistent disclosure tend to attract institutional capital more readily. Meeting these expectations is crucial for building trust and attracting serious capital. Timelines differ materially across jurisdictions, although, in practice, many steps can be navigated flexibly, allowing for adjustments based on the fund's specific needs and circumstances."
Selecting the right vehicle is the initial critical decision, with options such as RAIF, SIF, Exempted Company, Limited Partnership, QIF, or DFSA Exempt Fund each offering different legal forms, liability regimes, and marketing rights. Certain vehicles, like Luxembourg RAIFs, can accelerate time to market but still require an authorised AIFM and EU compliance. Jurisdictional filings and governance frameworks impose strict timelines and independent oversight requirements, for example Cayman registration within 21 days and mandatory auditors, administrators, or custodians. Investors demand transparency, independent valuation, audited accounts, and consistent disclosure. Common risks include underestimating compliance costs, governance planning, and mismatching structure to investor liquidity profiles.
Read at London Business News | Londonlovesbusiness.com
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