Setting up a Collective Investment Scheme (CIS) with more than one fund, often referred to as an umbrella fund or multi-class structure, is a strategic approach to investment management that offers several advantages over a Single Fund setup.
Overview of Multi-Fund CIS
A multi-fund (multi-class) CIS, or umbrella fund, is a type of Collective Investment Scheme that houses multiple sub-funds under a single legal entity. Each class operates independently like a sub-fund, with its own investment strategy, asset pool, and investor base. This structure allows for diverse investment opportunities within a unified framework, offering flexibility and efficiency in managing multiple portfolios.
Strategic Advantages of a CIS (more than 1 fund)
Enhanced Investor Attraction
The ability to offer a diverse range of investment options under one umbrella makes a multi-class CIS more attractive to investors. This structure can cater to different risk appetites and investment preferences, drawing in a broader investor base.
Streamlined Fund Launch
Launching a new class as a new sub-fund under an existing umbrella fund is more efficient and less time consuming than establishing new stand-alone funds. This streamlined process allows fund managers to quickly respond to market opportunities and introduce innovative investment strategies.
Competitive Edge
A well-structured multi class CIS can position itself competitively in the market by offering a comprehensive suite of investment options, supported by cost efficiencies and strong governance.
Conclusion
Setting up a CIS with multiple classes offers numerous strategic and operational advantages over a Single Fund. (One class) setup. The multi-class fund structure enhances diversification, cost efficiency, flexibility, and investor choice, making it a compelling option for fund managers and investors alike. By leveraging the regulatory framework and strategic location of Mauritius, fund managers can establish a robust and scalable multi-class fund CIS that meets the evolving needs of the global investment community. Understanding the differences in structure, flexibility, and operational requirements between Single Fund and Multi-Class Fund CIS is essential for making informed decisions and optimising the benefits of this innovative investment vehicle.
