Venture capital fund structure9/18/2023 Fund the underlying ventures through equity instruments only.Invest at least 90% of it’s committed capital in unlisted businesses, which are not more than 10 years old and.Be an Exempt Fund or a Qualified Investor Fund, open to Professional Clients only.The DFSA has listed a few criteria that specify what they consider to be a VC Fund that can be established in the DIFC. What is the definition of a VC Fund as per the DIFC? Entrepreneur-in-Residence: Industry experts who are hired as advisors or consultants to the venture capital fund manager on a temporary basis, often to assist with due diligence or vetting new startup ideas. Junior Associates: Junior employees with 1-3 years of experience in investment banking.Ĥ. Venture Partners/Deal sources: They source investment opportunities for the fund, based on the investment objective, and are paid based on deals they close for the VC Fund.ģ. They usually have experience in investment banking and also experience relative to the fund’s investment strategy.Ģ. General Partners/Fund Managers: They are responsible for all investment of the fund. Typical roles in a DIFC venture capital fund manager may include:ġ. What are some typical roles in a VC Fund Manager? It acts as the operator of the fund and manages it’s investments, with the aim of deriving high returns for it’s investors. The VC fund manager is responsible for identifying investment opportunities, innovative business models, or technologies, and those with the potential to generate high returns on investment for the fund. These investments are generally characterized as very high-risk/high-return opportunities. What is a Venture Capital Fund?Īccording to Investopedia, Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. There are multiple ways of establishing a fund in the DIFC, both private and public funds. While it started slow, the DIFC now has nearly 100 well-regulated and established funds in the centre. The DFSA authorizes and supervises all regulatory activities from the centre. The Dubai Financial Services Authority, or DFSA, is the independent regulator of all entities that engage in financial services from the DIFC. Who regulates financial services in the DIFC? The quality and independence of DIFC’s regulator, the prevailing common law framework, excellent infrastructure and tax efficiencies make it the perfect base to take advantage of the rapidly growing demand for financial and business services in the MENASA region. The Dubai International Financial Centre is one of the world’s top eight onshore financial centers and offers a secure and efficient platform for businesses and financial institutions to reach into and out of the emerging markets of the region. Zero-rate personal and corporate tax also make the DIFC an attractive destination to setup and manage investment funds. With DIFC Funds, Fund Managers can target the GCC market, and the wider MENASA region, taking advantage of the numerous Double Taxation Avoidance Treaties that the UAE has in place. The DIFC Registrar of Companies (ROC) offers multiple fund structures, included open-ended and closed ended investment companies, and GP-LP structures. The DIFC offers both Domestic Fund Manager and External Fund Manager licenses, both of which allow for the management of Public, Exempt and Qualified Investor Funds. The Dubai Financial Services Authority, or DFSA, acts as the independent regulator of fund managers and investment funds setup in the DIFC, which provides a high degree of comfort to individual and professional investors. It is well regarded in the international community as well. Besides offering a wide range of financial service activities, the centre also provides an integrated environment and world-class standard of living. The DIFC is a leading financial hub in the region. Why setup a Venture Capital Fund in the DIFC? The regime is a carve-out of the already fast-tracked Restricted Fund Manager regime, that is in place for entities that wish to only manage private funds. The DIFC has in place a path-breaking VC Fund Manager Regime, that promises to add to the current startup ecosystem being built through the DIFC Fintech Hive, the DIFC Innovation Hub and the recently added DIFC Venture Studio Regulations.
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