BVI closed-end investment or closed-end mutual funds
Closed-end funds raise a specific amount once through IPO (initial public offering), issue a fixed number of shares, to be bought by the investors as stock. Closed-end fund stock represents an interest in a specialized portfolio of securities that is actively managed by an investment adviser, usually focusing in a specific economic sector. Closed-end fund stocks vary according to supply and demand, so do changing values of the securities in the fund's holdings.
Closed-end fund should not be mistaken with a Closed Fund. Closed funds, are mutual funds that have been closed temporarily or permanently to new investors because the fund's asset base is too large to execute its investing style.
The British Virgin Islands is a very popular jurisdiction for many offshore hedge funds to be located. The BVI is known to have good financial oversight and relatively reasonable offshore hedge fund formation fees.
Closed-ended schemes funds, for example venture capital or private equity funds, are not regulated by the Mutual Funds Act or otherwise under BVI law, therefore can be set up without FSC licensing. A closed-ended fund formed as a BVI company is simply a company with all the advantages (including full tax exemption and corporate flexibility) characteristic of BVI companies.
A fund may be established in the BVI as either a company, a partnership or a unit trust. Whilst acknowledging the existence of other funds structures. Funds using a corporate vehicle are the overwhelmingly preferred vehicle.
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