THESE ARE TRYING TIMES. Social and economic systems on national and international levels have been disrupted to an unprecedented degree, while political and legal uncertainty also lurk. Not unlike other businesses, funds are considering what steps to take to maintain some stability for their clients and employees. The prudent fund manager will be reviewing the portfolio under management, considering existing strategies, and looking ahead. With so much uncertainty in the investing environment, flexibility is the order of the day.
Investment Funds & Regulatory Practice Head Kerry Anderson, outlines five things funds managers should be doing now. ( Full article download below.)
- Reviewing your fund documents
- Fund managers and fund directors should be reviewing their offering documents. If they have not already done so, they should be familiar with their rights and obligations, particularly the gate and redemption provisions in their offering documents.
- Communicating with investors
- Communicating with investors is imperative. Developing rapport with key investors could be beneficial to the fund in the long run.
- Reviewing investment strategy
- The current pandemic crisis has led to significant volatility in many asset classes, and fund managers may need to tweak their existing investment strategy to suit. This is where British Virgin Islands investment vehicles shine.
- Reviewing applicable laws
- Depending on the scenario facing a fund, considering its size, liquidity, and rate of redemptions, it may be beneficial for a fund to consider migrating to another jurisdiction like the BVI, whose laws may fit its future goals better.
- Reviewing your investor base
- The current turmoil in the markets can rattle investors. Many will be looking to change or diversify their current investments. Fund managers should consider whether they can attract new investors and what they need to do to successfully attract those new inflows.
No one doubts that today’s business environment is uncertain. However, this does not mean that opportunities aren’t out there. Investors are still looking for good returns and opportunities in the market for fund managers still exist. Fund managers must review their current investor base, investment strategy, and legal documents to assess their current situation. Then, they will be ready to take the steps that allow them to thrive, even in difficult circumstances. BVI funds can play a critical part in this exercise and should not be overlooked by the prudent fund manager.
Access the full article in PDF format here.
First published in IFC Review | Caribbean 2020 and in conjunction with BVI Finance.