Frank Nagy Financial Services offers a turn-key solution to set up a low cost hedge fund in the BVI.



The British Virgin Islands (BVI) is an attractive jurisdiction for hedge funds. The legislative structure in the BVI is modern and internationally recognized. Hedge funds domiciled in the BVI would benefit from the availability of higher quality banking and custody services in the jurisdiction.
Currently, The British Virgin Islands (BVI) have approximately 3,000 investment funds registered by the BVI Financial Services Commission (FSC). The most popular fund structures are a Closed-ended company (fund) and a licensed Professional Fund.


MOST POPULAR FUND STRUCTURES


Professional Funds

Majority of BVI funds are professional funds. To qualify as a professional fund, fund interests may only be made available to investors who are “professional investors”, with the minimum initial investment by each such investor being not less than U.S. $100,000 or its equivalent currency. In addition, the fund sponsors would be required to have an administrator, auditor, custodian bank and two (2) directors minimum (need not be located in the BVI).


A “professional investor” is defined as a person (i) whose ordinary business involves, whether for its own account or the accounts of others, the acquisition or disposal of property of the same kind as the property, or a substantial part of the property, of the fund or (b) who has signed a declaration that he, whether individually or jointly with his spouse, has net worth in excess of U.S.$1,000,000 or its equivalent in any other currency, and that he consents to be treated as a professional investor.


Incubator Funds

The incubator fund is expected to appeal to emerging managers looking for a low cost entry into the fund market, but with room to grow when its investors and AUM increases. The incubator fund has the following key features:

  • a maximum of 20 investors
  • a minimum initial investment of US$20,000 by each investor and
  • a cap of US$20 million on the value of investments of the fund.

  • The incubator fund is ideal for new managers and start-ups. There are no functionary requirements, accordingly, an incubator fund can be established and operated without an administrator, manager, custodian or auditor. Also, the fund is not required to have an offering memorandum but is required to file a description of its investment strategy and give appropriate investment warnings to investors. The fund has a two year limit. Prior to the end of the two year term, the fund must pursue applying for a Professional Fund or Private Fund designation.

With a global network of third party service providers, Frank Nagy Financial Services can provide introductions and advise you in choosing administrators, auditors, prime brokers, bankers and legal counsel who can work side-by-side with you assuring that you and your fund comply with state and federal tax rules and securities regulations. In addition, we are committed to provide ONE (1) year consultation and continual support regarding fund operations, trading, compliance and marketing.


Contact us to receive a free summary outlining the process and costs.



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Contact us to receive a free summary outlining the process and costs.















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In his book, Frank Nagy takes traders and investment advisers through the steps to properly set up and manage a fully functioning hedge fund. The Ultimate Hedge Fund Guide provides the knowledge and tools that traders and new managers need to be familiar with setting up and managing their own hedge fund.