Hedge Fund Platform

Panima’s Hedge Fund Platform, located in the Cayman Islands, operates as a Segregated Portfolio Company (SPC), enabling startup hedge fund managers to launch their strategies within six to eight weeks.

The Panima Hedge Fund Platform, Supporting Managers Since 2021

Established in 2014, our SPC collaborates with third-party providers to offer comprehensive front-to-back services, including legal, accounting, administration, operations, and custodial support.

This streamlined approach aims to reduce costs and operational complexities for fund managers, allowing them to focus on overseeing investments and fund growth.

The SPC structure facilitates the creation of distinct Segregated Portfolios (SPs) within the platform, each with tailored offering documents aligning with the fund manager’s investment strategy. SPs are legally separate entities, benefiting from statutory segregation, ensuring their assets and liabilities remain independent from other portfolios and the SPC’s general assets. The SPC, outlined in its Memorandum, has the flexibility to pursue any object or purpose within specified restrictions.

This legal separation safeguards against risks, preserving the autonomy of fund managers to customise investment strategies, risk management, and investor terms, protecting the interests of both investors and fund managers.

Why Cayman?

The Cayman Islands stands as the predominant destination for investment funds, drawing in 80% of newly established offshore funds. It is believed that Cayman accommodates over 75% of the global offshore hedge funds and manages nearly half of the industry’s estimated assets under management, totalling around US$1.1 trillion.

STRUCTURING OPTIONS

Cayman Islands hedge funds can be structured as exempted companies, LLCs, limited partnerships, or unit trusts, with exempted companies limited by shares being the most common. Umbrella structures like segregated portfolio companies and umbrella unit trusts offer asset and liability segregation for umbrella funds. The formation process for all entities is streamlined, typically taking one day with express service. The Cayman Islands government imposes no direct taxes on hedge fund profits or dividends, providing flexibility in structuring. However, investors and entities are still subject to taxes in their home jurisdictions and must comply with those obligations.

STRONG REGULATORY FRAMEWORK

Cayman Islands hedge funds are regulated under the Mutual Funds Act, governing open-ended pooled investment funds. These funds, defined as companies (including LLCs), partnerships, or unit trusts issuing redeemable equity interests, aim to pool investor funds for risk diversification and profit distribution. Registering as a Cayman Islands Registered Fund is a simple process. Submit the application form, offering document, and consent letters from the administrator and auditor, along with the registration fee, via CIMA’s web portal. No prior government or regulatory approvals are required, but registration must be completed before the launch date.

FORMATION

SERVICE PROVIDERS

Registered Funds in the Cayman Islands must maintain a local office and undergo annual audits by a CIMA-approved auditor. An administrator is required, but it need not be based in the Cayman Islands. CIMA enforces a ‘four-eyes’ principle, necessitating a minimum of two directors or managers, and registration under the Directors Registration and Licensing Act is required for directors, though residency in the Cayman Islands is not mandatory.