Innovative Fund Structures for Sophisticated Investors
Mauritius offers two complementary sophisticated fund vehicles, the closed-end fund and the Variable Capital Company, providing flexibility for private equity, hedge fund, and multi-strategy investment mandates that open-ended CIS structures cannot accommodate.
Closed-end funds are investment vehicles with a fixed number of shares, typically available only to sophisticated or qualified investors. They are favoured for private equity, infrastructure, and illiquid investment strategies where redemption on demand would be impractical, the fixed capital structure allows the fund manager to take long-term positions without the liquidity constraints of open-ended structures.
The Variable Capital Company (VCC) is an innovative Mauritius structure, an umbrella fund vehicle that allows multiple sub-funds to operate under a single corporate entity with segregated assets and liabilities. This significantly reduces administration cost for managers running multiple strategies, eliminating the need to establish a separate legal entity for each sub-fund while maintaining complete asset and liability segregation between them.
Both structures are regulated by the FSC under the Securities Act 2005 and related regulations. Aurevya advises on fund strategy assessment, structure selection, FSC authorisation, offering document preparation, and service provider appointment, providing comprehensive support for the establishment of both closed-end funds and VCCs in Mauritius.
FSC
Regulated
Financial Services Commission authorisation under the Securities Act 2005, providing internationally recognised regulatory standing for sophisticated fund vehicles serving qualified investors.
VCC —
Multiple Sub-Funds
The Variable Capital Company allows multiple sub-funds with segregated assets and liabilities under a single corporate umbrella, dramatically reducing administration costs for multi-strategy fund managers.
Private Equity
& Alternatives
Both structures are particularly well-suited to private equity, infrastructure, real assets, and alternative investment strategies, where the illiquid nature of investments makes closed-end capital structures essential.
Scope of Authority
Key Features
Fixed Capital Structure
The closed-end fund's fixed capital structure, a defined number of shares issued at inception with no ongoing redemption obligations, enables fund managers to commit to long-term, illiquid investment strategies without the liquidity management burden of open-ended funds.
VCC Sub-Fund Architecture
The VCC umbrella structure allows a manager to operate multiple sub-funds under a single corporate entity, each sub-fund may have different investment strategies, investor bases, and fee arrangements, while sharing the governance infrastructure of the umbrella vehicle.
Asset Segregation
A defining feature of the VCC: assets and liabilities of each sub-fund are legally segregated from those of other sub-funds and from the umbrella vehicle, ensuring that creditors of one sub-fund cannot reach the assets of another, providing the ring-fencing that sophisticated investors require.
PE & Alternatives Eligible
Both closed-end funds and VCCs are eligible vehicles for private equity, venture capital, infrastructure, real estate, hedge fund, and multi-asset alternative strategies, providing the regulatory authorisation required for investment mandates that go beyond the scope of standard CIS structures.
Sophisticated Investor Access
Both structures are restricted to sophisticated or qualified investors, as defined in the FSC framework, enabling the fund to adopt the governance standards and investment mandates appropriate for professional investors without the retail investor protections that would constrain an open-ended CIS.
Administrative Efficiency
The VCC structure delivers significant administrative efficiency for multi-strategy managers, one set of constitutional documents, one corporate governance framework, one registered office, and one set of regulatory filings, covering multiple sub-fund strategies and investor pools.
Process
How It Works
01
Fund Strategy Assessment
We work with the manager to assess the investment strategy in detail, asset classes, target investments, investment horizon, liquidity profile, target investor base, and fee structure, establishing the parameters that will determine the optimal fund structure and the FSC authorisation requirements.
02
Structure Selection (Closed-End vs VCC)
We advise on the choice between a standalone closed-end fund and a VCC, considering the number of strategies to be operated, the anticipated scale of the fund programme, the investor base, and the administrative cost implications of each structure, ensuring the selected vehicle is optimally suited to the manager's business model.
03
FSC Application
Preparation and submission of the FSC authorisation application, business plan, investment strategy description, offering document, key personnel documentation, and service provider appointments, ensuring a complete and professionally presented application that meets the FSC's requirements for sophisticated fund vehicles.
04
Offering Document
Preparation of the offering document, the Private Placement Memorandum or equivalent investor disclosure document, covering the investment strategy, risk factors, fee structure, investor eligibility criteria, subscription and redemption terms, and governance framework of the fund.
05
Service Provider Appointment
Coordination of the service provider appointments required for the fund, fund administrator, custodian, auditor, and legal counsel, ensuring that a complete professional services team is in place before the fund launches and that service provider agreements are on commercially appropriate terms.
06
Launch
Coordination of the fund launch, FSC authorisation confirmation, investor subscription process, initial investment deployment, and the operational procedures required for ongoing fund management, ensuring the fund is fully operational and ready to pursue its investment mandate from the first day of trading.
Practical Considerations
Requirements & Timeline
Regulatory Requirements
FSC authorisation under the Securities Act 2005
Offering document, Private Placement Memorandum or equivalent disclosure document
Qualified fund manager, FSC-licensed investment manager
Custodian appointment, FSC-licensed custodian for fund assets
Auditor, approved auditor for annual financial statements
Annual reporting, audited accounts and FSC annual return
Indicative Timeline
Strategy Assessment & Structure Selection: 2–3 weeks for straightforward strategies; longer for complex multi-strategy programmes
Application Preparation: 5–10 weeks, the offering document is typically the most time-intensive preparation element
FSC Review: 10–16 weeks from submission, the investment strategy assessment and service provider documentation are core elements of the review
Launch: 3–6 weeks post-authorisation for investor subscription, initial investments, and operational setup
Common Questions
Frequently Asked Questions
An open-ended Collective Investment Scheme (CIS) issues and redeems shares on demand, investors can subscribe and redeem at regular intervals, typically at NAV. This requires the fund to maintain liquidity in its portfolio to meet redemptions, which constrains the investment mandate to predominantly liquid assets. A closed-end fund issues a fixed number of shares at inception and does not offer ongoing redemptions, investors are typically locked in for the life of the fund, which may be 5–10 years for private equity vehicles. This fixed capital structure frees the manager to invest in illiquid assets, private equity, infrastructure, real estate, and direct lending, without concern for redemption liquidity. Secondary market liquidity may be provided through listing or through secondary transfer provisions in the fund documents.
A Variable Capital Company (VCC) is an umbrella corporate vehicle under which multiple sub-funds can be operated, each with legally segregated assets and liabilities. The VCC is incorporated as a single company with variable capital, the share capital can vary as investors subscribe and redeem at the sub-fund level. Each sub-fund of the VCC may have its own investment strategy, investor base, fee structure, and currency of denomination, but shares the umbrella's corporate governance, registered office, and regulatory filing obligations. The defining legal protection is asset segregation: the assets of each sub-fund are ring-fenced from the liabilities of other sub-funds and from the umbrella itself, so that creditors of one sub-fund cannot reach the assets of another. This makes the VCC particularly attractive for fund managers running multiple strategies who wish to consolidate their fund programme under a single, efficient administrative structure.
Yes. One of the primary attractions of the VCC structure is that each sub-fund can pursue a completely independent investment strategy, the umbrella imposes no requirement for strategic coherence between sub-funds. A VCC manager could simultaneously operate a private equity sub-fund investing in African mid-market companies, a fixed income sub-fund investing in African sovereign debt, and a digital assets sub-fund, each with its own investor base, fee structure, reporting currency, and liquidity terms. The sub-funds share only the umbrella's governance infrastructure and regulatory filing obligations. Each sub-fund must be separately authorised by the FSC, and the offering document for each sub-fund must fully disclose its strategy, risks, and terms to investors.
Mauritius closed-end funds are typically restricted to sophisticated or qualified investors, as defined under the FSC framework. The qualification criteria typically relate to the investor's net worth, investment experience, or professional status. Institutional investors, pension funds, insurance companies, endowments, sovereign wealth funds, and fund-of-funds, are typically qualified by default. Family offices and high-net-worth individuals may qualify subject to the specific criteria set out in the fund's offering document. The restriction to sophisticated investors enables the fund to adopt governance terms and investment strategies that would not be appropriate for retail investors, including illiquid strategies, leverage, and complex investment structures.
The FSC framework for sophisticated funds typically requires a minimum subscription amount that reflects the institutional and high-net-worth investor base, commonly USD 100,000 or equivalent as a minimum per investor, though the specific minimum is set by the fund manager and disclosed in the offering document. There is no FSC-mandated minimum subscription amount for all closed-end funds and VCCs, but the sophisticated investor qualification criteria provide an indirect threshold. Many managers set minimum investments at USD 500,000 to USD 1,000,000 to attract institutional-quality investors and maintain an appropriately sized investor base for the fund's strategy and economics. Aurevya advises on setting minimum investment terms that are commercially appropriate for the target investor profile and strategy.
Continue Exploring
Related Services
CIS Manager
The Collective Investment Scheme manager licence, the regulated investment management authorisation required to manage closed-end funds and VCCs on behalf of investors, covering the full scope of fund management activities.
The FSC asset management licence, for managers seeking broader portfolio management authority alongside their fund management mandate, serving institutional clients with both fund and separately managed account strategies.
The FSC custodian licence, providing the regulated asset safekeeping infrastructure required for closed-end funds and VCCs, and satisfying the custodian appointment requirements of the FSC's fund authorisation framework.