MAURITIUS Law and Practice Contributed by: Fazil Hossenkhan, Nafiisah Jeehoo, Kelly Li and Alicia Kwan Pang, Bowmans
2. Funds 2.1 Types of Alternative Funds and Structures Types of Alternative Investment Funds (AIFs) The two common types of AIFs formed in Mauritius are collective investment schemes and closed-end funds. Collective investment schemes (CISs) A CIS is an open-end fund which has, as its principal feature, an obligation to redeem the investors’ shares at their request (at a price corresponding to the net asset value of that participant’s investments). Inves - tors in a CIS generally do not have day-to-day control over the fund’s management. A CIS is set up mainly to invest in portfolios of securi - ties, or other financial assets, real property or non- financial assets, subject to the approval of the FSC. CISs are typically structured as companies, trusts or protected cell companies. CISs can be further categorised into professional col - lective investment schemes (PCISs), expert funds or specialised funds. PCISs A PCIS is a CIS where shares or interests are offered by way of private placement or only to “sophisticated investors”, that is, investors which include the govern - ment of Mauritius or of a foreign country; a statutory authority established by an enactment; a bank, fund manager or insurer; a CIS; or a closed-end fund. It also includes an investor that warrants, at the time of entering into a securities transaction, that: • its ordinary business or professional activity includes entering into securities transactions, whether as principal or agent; • in the case that the investor is a natural person, their individual net worth or joint net worth with their spouse exceeds USD1 million, or its equiva - lent in another currency; or • it is an institution with a minimum amount of assets under discretionary management of USD5 million, or its equivalent in another currency.
Expert funds An expert fund is a fund where the shares or interests are only offered to expert investors, that is, investors who make an initial investment, for their own account, of no less than USD100,000, or sophisticated inves - tors (as previously described), or any similarly defined investor in any other securities legislation. Specialised funds A specialised fund is a fund which invests in high-risk or illiquid assets such as commodities, derivatives and real estate, subject to the approval of the FSC. Closed-end funds (CEFs) A CEF is an arrangement or a scheme which, as opposed to a CIS, has no obligation to redeem an investor’s shares at their request, that is, investors do not have control over exiting the fund. Like CISs, CEFs are formed to invest funds in a port - folio of securities or in other financial or non-financial assets, or real property, subject to the approval of the FSC. CEFs are typically structured as companies or limited partnerships. CEFs are known to be the preferred structures for pri - vate equity funds and are subject to lighter regulations compared to CISs. CEFs can be further categorised into professional collective investment schemes (PCISs), as previously described. Structures Used to Set up AIFs The most common structures used to set up alterna - tive funds are companies, limited partnerships, pro - tected cell companies and trusts, features of which are set out below. As of last year, it is also possible to establish a fund under the variable capital company (VCC) regime. Companies Companies are incorporated under the Companies Act 2001 and may be formed as private or public companies. Participants are issued with “shares” in the company.
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