Fund Services

Sterling is an Unrestricted Investment Fund Administrator regulated by the Securities Commission of The Bahamas.

We offer tailor-made services to design and structure investment funds in The Bahamas and other jurisdictions. We can advise and organize fund structures ranging from single-class Bahamas “SMART” Funds to more complex multi-class segregated cell funds and master-feeder fund structures. Under delegated authority from the Securities Commission of The Bahamas, we have the power to licence funds ourselves.

Sterling provides a comprehensive fund administration service for funds with a wide range of investment styles and including for single and multi-class funds, and open and closed end funds.

Our experienced team offers a broad range of solutions drawing on our extensive expertise in fund accounting, valuation, investor reporting and portfolio/investment analysis. As an independent service provider, we coordinate the fund manager, investment advisor, fund promoter, bank and custodian relationships to act as the centralized point of control and reporting.

Our administration services include automated registrar and transfer agency, investor share register services and dedicated investor communications and share pricing.

Background

We have advised and established various types of fund structures, including the following:

• Master-feeder structures
• Private client funds
• Private equity funds
• Hedge funds
• Umbrella and Segregated Cell Multi-Class funds
• Funds investing in real estate, wine, art and other asset classes

Although we also provide services to retail funds, our specialty is for non-traditional funds such as single or small group investor funds, established as either funds of funds, alternate investment-type hedge funds, including long and short-term equity, option, high yield and emerging market bonds, currencies, high volume trading, futures and other derivatives.

We establish and service funds of all sizes, with net assets ranging from $1 million to $500 million+. We do not differentiate in terms of the quality of service offered between large, well-established investment managers and fledgling managers and promoters.

Overview of Fund Services

We provide Promoters with information and counsel prior to the formation of an investment fund, advising on appropriate fund types and structures, depending on the investment objective and strategy of the proposed fund, number of investors, category of investor and transactional volume.

Once a fund structure is agreed and due diligence completed, we will establish the Fund, which is typically a Bahamas International Business Company with at least two classes of shares, comprising one class of voting, non-participating shares and another class of non-voting, participating (investor) shares. We can also accommodate other forms of structures, such as limited partnerships.

We will prepare the Offering Memorandum or Term Sheet and the other constitutive documents and agreements and assist in opening banking and custodian relationships. For Professional and SMART Funds, we will issue the fund licence under the delegated authority of the Securities Commission of The Bahamas.

We maintain the accounting records in accordance with IFRS (or other applicable accounting standards) and calculate the periodic Net Asset Value (“NAV”).

We provide Registered Office for the Fund and act as its Registered Agent, including, if required, the provision of office facilities and support.

We offer full FATCA and CRS reporting services and arrange ISIN’s, LEI’s and CUSIP’s, as applicable.

Investor relations are maintained by the dissemination of regular client reports, including NAV statements, reports, and contract notes, in addition to advising investors of material changes to the offering documents and other pertinent information.

Typical forms of Bahamian Funds

SMART Funds

“SMART” (Specific Mandate Alternative Regulatory Test) Funds are a group of investment vehicles that allow for swift structuring as investment funds, without the regulatory and financial bureaucracy typically associated with retail funds. This category of fund has been designed to cater to sophisticated investors, offering adequate tailored regulatory oversight without sacrificing the flexibility needed to facilitate the transactions of today’s promoters. As a licensed regulated entity, a SMART Fund offers significant advantages over a simple offshore company or unregulated fund structure in today’s highly regulated investment environment. SMART Funds encourage innovative structuring options that are looked upon favorably by the Securities Commission of The Bahamas, whose risk-based regulatory approach is particularly supportive to the objectives of sophisticated investors.

SMART funds offer the opportunity to design a specific type of investment fund template which can be modified to a client’s specific needs. They enable private investment funds to operate in a well-regulated supervisory environment appropriate to the fund and a fast-track application process through Sterling as an Unrestricted Fund Administrator with the authority to license both SMART and Professional Funds, allowing for a timely launch of the fund.

SMART funds offer significantly reduced costs in comparison with other categories of funds, mainly due to the requirement for a Term Sheet in lieu of an Offering Memorandum or Prospectus and the capacity for investors to waive the annual audit. In addition, there is the option to upgrade to a Professional or Standard Fund as and when the promoters wish.

Various categories of SMART Fund licenses have been approved since their creation in December 2003. The three models which may be most useful to private fund sponsors and managers are the “Super Qualified Investor Fund”, the “Incubator Fund” and the “Private Client Fund” which can be summarized as follows:

a) The Super Qualified Investor SMART (SMART007)

An investment vehicle designed mainly for professional asset managers, institutional investors and ultra high net worth individuals.

Key features are:

• Maximum of 50 investors
• Minimum initial subscription of $500,000
• No prospectus required – only a term sheet
• Low set-up costs
• Option for waiver of annual audit by investors
• May be licensed by Sterling

b) The Incubator SMART (SMART002)

An investment fund often established to generate a performance history prior to the upgrading of the license to a Professional Fund or Standard Fund in anticipation of a public offering.

Key features are:

• Maximum of 10 sophisticated investors
• No prospectus required – only a term sheet
• Low set-up costs
• Option for waiver of annual audit by investors
• May be licensed by Sterling

c) The Private Client SMART (SMART004)

A licensed holding vehicle designed for a small group of related persons, perhaps under a Family Office structure or partnership.

Key features are:

• Maximum 5 ordinary investors
• No prospectus required – only a term sheet
• Low set-up costs
• Option for waiver of annual audit by investors
• May be licensed by Sterling

Administrator is not required where directors opt to carry out administrative duties; however, if directors opt to carry out such duties, only the Securities Commission of the Bahamas will be able to license the Fund.

Professional and Standard Funds

Professional funds are designed specifically for sophisticated investors and are a category of Bahamian funds outside of the SMART models. This type of investment fund sometimes, but not necessarily, engages in uniquely complex investment strategies. In order to protect the investors’ interests, investors in Professional Funds are required to be knowledgeable about investing in financial markets.
To this end, all investors in Professional Funds are required to meet the criteria of an Eligible Investor.

Standard funds and Professional funds have common requirements, with the exception that Standard Funds allow for any type of investor to subscribe.