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New UK fund vehicle will give Cayman, Ireland and Luxembourg a run for their money

3rd February 2016

Author: Ed Turner

But the largest users of ACS may well be small to mid-sized fund managers and even start-ups that are presently using orthodox fund vehicles regulated under the UCITS or AIFMD legislation, or by the Cayman Islands Monetary Authority (CIMA). For example, HSBC is administrator to the Equitile fund management start-up headed by Andrew McNally (formerly UK chairman of Berenberg) and George Cooper (late of Bluecrest Capital Management) that saw competitive advantage in both its management company and its funds being regulated onshore by the Financial Conduct Authority (FCA).

 

“Being onshore, and transparent, clearly helps to win the trust and confidence of investors,” says Andrew McNally. Equitile is setting up an ACS as a master structure and will direct the appropriate investors into the ACS to get the superior withholding tax treatment, plus all the benefits of being completely transparent about it. Equitile will also use an OEIC to gather investors which are not gross funds. In other words, the ACS allows them to get institutional and retail business into the same fund.

 

Interestingly, Equitile aims to distribute its UK-based ACS funds outside the UK. “Traditionally, UK funds have been seen as a product for the UK market,” says Turner. “There are UK fund managers which sell their UK fund range across borders, but most UK managers sell UK-domiciled funds to UK investors only. As clients get used to the structure, ‘Brand Britain’ will be an additional attraction in markets such as Scandinavia and Asia.”

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