AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
1. Market Overview 1.1 State of the Market
vehicles (CCIVs), which can be used as invest - ment vehicles for a variety of asset classes. 2.1.2 Common Process for Setting Up Investment Funds A regulated Australian unit trust will require reg - istration with the Australian Securities & Invest - ments Commission (ASIC). Such unit trusts are known as registered managed investment schemes. Once ASIC receives an application, it must make a decision on registration within 14 days, and the key approval criteria are: • the trustee of the fund holds an Australian Financial Services Licence (AFSL) authorising it to be a “responsible entity” of a registered managed investment scheme; • the responsible entity is an Australian public company; and • the constitution of the fund meets the require - ments of the Corporations Act 2001 (Cth) (the “Corporations Act”) and relevant ASIC guidance. The key required documentation is a constitu - tion/trust deed. An investment management agreement is also typically required, by which the trustee outsources investment management to a manager entity. The setting-up process is not lengthy, and costs are reasonable. Establishment of a registered managed investment scheme and registration with ASIC can take place within three to four weeks. An unregistered unit trust can be established within one to two weeks. The above timings assume a simple structure and that relevant licensing arrangements are previously in place.
The Australian investment funds market is highly developed from both a regulatory and commer - cial perspective. Australia is a jurisdiction that is welcoming to retail and alternative fund strate - gies and managers. There has continued to be a significant flow of transactional and regulatory matters following initially restrained activity during the COVID-19 pandemic, and this is anticipated to continue in the year ahead. 2. Alternative Investment Funds 2.1 Fund Formation 2.1.1 Fund Structures The most commonly used structure is a unit trust due to its flexibility. For private equity and venture capital funds, a unit trust or a limited partnership, usually in the form of a venture capital limited partnership (VCLP) or early-stage venture capital limited partnership (ESVCLP) (in certain circumstances), can be used. A unit trust is simpler to establish and offers greater flexibility with respect to the asset class - es in which it can invest; however, certain limited partnerships can attract tax benefits for inves - tors and fund managers when certain require - ments are met. A unit trust is a suitable local structure for hedge and credit strategies. Following legislative changes in 2022, it is pos - sible to establish corporate collective investment
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