OFFSHORE FUNDS STRUCTURING, FORMATION AND OPERATIONS

WAISC CONFERENCENIAGARA FALLS, CANADA

SEPTEMBER 2016

Panelists

2

Moderator Panelists

Darin Renton– Partner, Stikeman Elliott LLP

Tonesan Amissah – Partner,

Appleby (Bermuda) Limited

Tim Baron – Partner,

Davies Ward Phillips & Vineberg

LLP

Roderick White – Director,

Equinoxe Alternative Investment

Services

Agenda

● Going offshore: factors to consider

● Legal structures of interest to the Canadian market

● Operational issues

● Advantages of Bermuda

3

Going offshore: factors to consider

• Why set up an off shore Structure?

• Which jurisdiction?

• Access to investors

• Which structure suits the strategy?

4

Legal Structures Of Interest To The Canadian Market

• Segregated Accounts Company

• Limited Partnership / Closed Ended Fund

• Limited Liability Company

• Trust Structures

5

Segregated Accounts Company (SAC)

• Segregated accounts companies can be used to insulate separate pools of assets within the

same company.

• Initially used by insurance companies, then mutual funds; now used by a diverse range of

businesses for multiple purposes, including hedge funds and family offices.

• A cell within a Bermuda SAC can invest in another cell in the same structure (a Cayman SPC

does not have this option).

• In a fund context, a Master/Feeder structure can be established within a single corporate

vehicle, minimizing administration and expenses.

• Other common uses: umbrella funds, fund of funds, or a series of private equity funds.

• Extensively tested in Bermuda courts and segregation concept upheld (New Stream Capital

Fund, 2010, 2012; CAI Master Allocation Fund, 2011).

Limited Partnership / Closed Ended Fund

• Private Equity funds are typically formed as limited partnerships, in a closed ended structure with

capital commitments and drawdowns. Companies also routinely seen, and occasionally Unit Trusts.

• Partnership may elect to have legal personality, separate and distinct from its investors/limited

partners.

• No requirement for local GP, no prescribed service providers.

• Recent (March 2016) enhancements to Bermuda’s Partnership laws included:

- the extension of safe harbour provisions to limited partners who are serving on advisory boards,

providing greater flexibility for internal governance and administration;

- the ability for limited partnerships with legal personality to convert to/from exempted limited

companies;

- the ability for limited partnerships to continue and discontinue between Bermuda and other

jurisdictions.

Limited Liability Company

• A hybrid vehicle combining many of the key characteristics of companies and

limited partnerships.

• Commonly used in the US for private equity funds and other asset

management structures, as well as trusts and private client vehicles.

• Particularly attractive to sponsors and promoters from the US looking for a

vehicle that is closely aligned with the Delaware limited liability company.

• LLCs have been introduced in Bermuda and Cayman this year.

• Key features – Corporate vehicle, can be managed by member, no fiduciary

duties.

Operational Issues

• Availability of service providers / operational expertise in the offshore jurisdiction

• Ability to support FATCA / CRS / CbC reporting

• Access to regulator

• Costs

� Government and regulatory fees

� Local auditor sign-off costs

� Directors’ registration/licensing fees

• One stop shop

� Direct flights

Advantages of Bermuda

Strategic

Location

Legal System

Infrastructure

Quality of Life

Internationally

Recognized, Commercially Sensible Regulation

Breadth of Expertise

10

Maxwell Roberts Building, 6th Floor

1 Church Street

Hamilton HM 11

Bermuda

+1 441 292 0632

info@bda.bm

www.bda.bm11

For further information about The Bermuda Advantage:

Sean MoranBusiness Development Managersean@bda.bm

+1 441 292 4203