Details of private and closed-ended schemes are included in the Private section.

Abacus are able to assist with input into the choice of fund scheme and domicile and liaise with the other service providers required for a scheme.

Authorised Schemes (retail investors)

Authorised Schemes are suitable for promoters requiring a retail investment product benefiting from a high degree of investor protection. Investors in authorised schemes are covered by a compensation scheme operated by the Isle of Man Financial Supervision Commission.

Authorised Schemes are funds that are subject to detailed and prescriptive regulation and which are capable of promotion to the general public in the Isle of Man, the United Kingdom and elsewhere.

International Schemes (institutional investors)

International Schemes can be targeted to institutional investors and to regulated intermediaries and are very flexible since few regulatory investment restrictions are applicable.

International Schemes are funds that are subject to limited regulation and which are capable of promotion outside the Isle of Man, subject to host jurisdiction rules.

International Schemes must be audited annually

Specialist Funds (sophisticated and professional investors)

Specialist Funds are aimed at institutional and sophisticated professional investors

There are no regulatory restrictions on assets classes, trading strategies or leverage however the Specialist Funds must receive investment advice or management services from a regulated entity.  A Specialist Fund must be audited annually by a qualified auditor.

The minimum subscription requirement is at least US$100,000 (or currency equivalent) and investors must have a net worth in excess of US$1m.

The Specialist Fund is ideally suited for institutional and sophisticated investors investing into alternative investment funds or hedge funds.

Qualifying Funds (sophisticated and professional investors)

Qualifying Funds are aimed at institutional and experienced non-retail investors who must certify that they are sufficiently experienced to understand the risks involved with an investment into the scheme.

The Qualifying Fund must appoint a promoter and a custodian who is either an Isle of Man licence holder or holds the equivalent in a jurisdiction with acceptable regulatory standards. A Qualifying Fund must be audited annually by a qualified auditor and there are specific director requirements.

There is no requirement for pre-approval of the scheme particulars so a Qualifying Fund can be launched quickly.

These can be domiciled in either the Isle of Man or other offshore jurisdictions depending on the type of investments being made and the taxation treatment of the investors.

The Isle of Man scheme types best suited to these private arrangements are Exempt International Schemes or Closed Ended arrangements. These can be structured as companies, unit trusts, limited partnerships or contractual arrangements.

Exempt International Schemes (family office and private type investments)

Exempt International Schemes are well suited for use by small groups of investors, such as “friends and family” and private investment arrangements, where wide promotion and extensive regulation is unnecessary.

These schemes are unregulated private funds which cannot be marketed to the public and are restricted to having no more than 49 participants.

There is no requirement for a custodian or auditor to be appointed.

Closed-Ended Investment Companies

Closed-Ended Investment Companies are not subject to fund regulation in the Isle of Man as they do not provide investors with a right of exit during the life of the scheme.

As periodic subscriptions or redemptions are not possible these schemes are ideally suited to illiquid investments such as unlisted securities, venture capital, private equity or property investments where the investor are committed for a period of time typically several years.

In IPO or private equity situations these enable companies to raise money when the assets held are illiquid and thus difficult to price. These companies are ideally suited for listing on London’s Alternative Investment Market (AIM).

Overseas Schemes

As a licensed third party fund administrator Abacus are able to administer collective investment schemes domiciled in jurisdictions other than the Isle of Man. Typically these are the Cayman Islands, British Virgin Islands and Bermuda.

These schemes need only be regulated in their jurisdiction and can be badged as an “Overseas” scheme from an Isle of Man regulatory perspective. This allows for schemes domiciled in another jurisdiction’s to be administered in the Isle of Man with no additional regulatory requirements.

Depending on the offshore jurisdiction virtually all aspects of a scheme can be administered from the Isle of Man with the scheme typically just needing a registered office and Corporate Service Provider in the local jurisdiction.

Alternatively should a scheme wish to enjoy the comfort of dual regulation it can be regulated to meet its domicile’s regulations and also fall within one of the Isle of Man scheme types.

Related Services

Fund TypesMalta Schemes