Wells Fargo Prime Services Business Consulting Industry and Regulatory Update

The Wells Fargo Prime Services Business Consulting Team spoke with Catherine Pham and Jennifer Crooke about the Cayman Limited Liability Company (Cayman LLC), the advantages of the new structure and how they are being used by the fund industry.

Since the introduction of the Cayman LLC, close to 600 Cayman LLCs have been registered. We understand that a few of these are being used as fund vehicles, but the majority are not. Why? The use of the exempted company as the offshore fund vehicle in the hedge fund context and the use of the exempted limited partnership as the offshore fund vehicle in the private equity fund context have been tried and tested by the market. These vehicles are very familiar to investors, managers/sponsors and other industry participants and there has been little appetite thus far to deviate from the norm. However, we expect that the use of Cayman LLCs as fund vehicles will gain momentum as the industry becomes more familiar with the advantages of the Cayman LLC. In the meantime, Cayman LLCs are being used as general partners of both Cayman exempted limited partnerships and onshore partnerships, management companies, carried interest distribution vehicles, investment holding vehicles, blockers and joint venture vehicles, to name a few examples.

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The document and any other materials accompanying them (the Materials) are owned by Wells Fargo Prime Services Business Consulting Group and are provided for general informational purposes only. The Materials are not intended to provide, and must not be relied on for, accounting, legal, regulatory, tax, business, financial or related advice or investment recommendations. Mourant Ozannes' involvement was as a guest contributor only.

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