Guide

Family Offices – Launching an Investment Fund

This article features in Issue One of our Private Wealth Perspectives Newsletter.

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Extending the remit of a family office to establish a bona fide fund presents many challenges. One challenge is balancing the right investment fund structure for the family office and its beneficiaries whilst making it attractive for outside investors. This guide considers the benefits of using Jersey or Guernsey and explores the key steps needed to launch an investment fund within your family office.

Key benefits of an investment fund structure for a family office include:

• the pooling of family wealth into a single managed structure;
• concentrating investment capital to make a larger impact;
• allowing family members (as the fund's investors) to select their level of participation;
• allowing family members to invest confidentially;
• centralising decision making and administration which can lead to cost savings;
• providing flexibility to admit outside third party capital/investors;
• modernising the way in which the interests of the family office team are aligned and/or are incentivised.

For a family office considering this option, key decisions will need to be made on the fund's domicile, structure, and its service providers. Jersey and Guernsey have long been popular domiciles for fund vehicles and are attractive jurisdictions for a family office looking to establish a fund. The Channel Islands' strengths lie in their stability, their proven reputation with investors and fund managers alike and their flexibility when it comes to choosing a fund structure and the appropriate fund regulation to be applied to your fund.