MUTUAL FUND · MFA
Mutual Fund (open-ended)
Regulated by Mutual Funds Act (2025 Revision). Continuous subscriptions and redemptions. Categories: Registered, Administered, Master, Limited Investor. Hedge funds, FoF, liquid strategies.
Hedge funds02 · Investment Funds · $5T+ AUM
Investment fund
in Cayman Islands —
global standard.
More than 60% of the world's hedge funds and 58% of all crypto funds are registered here. Mutual Funds Act, Private Funds Act and ELP Act provide a complete toolkit: from classic equity funds to tokenized strategies.
★ Full article · 21 min read
Exempted Limited Partnership: world's primary fund structure →
Fund types
Six formats —
for any strategy
All Cayman funds fall into two main categories: open-ended (Mutual Funds) and closed-ended (Private Funds). The first — for liquid strategies with regular subscriptions, the second — for PE/VC/real estate.
PRIVATE FUND · PFA
Private Fund (closed-ended)
Regulated by Private Funds Act (2025 Revision). Closed-ended, no redemption on demand. Private equity, venture capital, real estate, infrastructure, secondaries.
PE / VC / REELP · PRIMARY VEHICLE
Exempted Limited Partnership
Primary fund structure. General Partner manages, Limited Partners invest without liability. Tax-transparent, flexible distributions, strong case law precedent.
Hedge / PE standardMASTER / FEEDER
Master / Feeder
Master fund (Cayman) + Feeder funds (Cayman + Delaware/Luxembourg). US tax-exempt and non-US investors segregated — unified investment strategy in master fund.
Multi-jurisdictionSPC FUND
SPC Fund (multi-strategy)
Segregated Portfolio Company where each portfolio is a separate strategy with isolated assets and liabilities. One MLRO, one auditor, up to 30+ cells in one wrapper.
Multi-strategyTOKENISED FUND
Tokenised Fund (2026)
Per 2026 legislative update — funds can issue tokens representing fund interests. Tokenized funds under MFA / PFA exempt from VASP registration (if custody incidental).
Web3-nativeMutual Fund categories
Four subcategories
by size and investor type
Mutual Funds Act (2025) divides open-ended funds into four registration categories. Fund size and investor type determine compliance requirements, minimum subscription and cost.
- ARegistered Mutual Fund (Section 4(3))$100k+
Minimum subscription $100,000 per investor. Most common option for hedge funds.
- BAdministered Mutual Fund (Section 4(1)(b))retail
Has licensed administrator. Subscription can be below $100k. Standard for retail funds.
- CMaster Fundmaster
Master in master/feeder structure. Registered separately, has its own license but simplified requirements.
- DLimited Investor Fund (LIF)≤ 15 LP
Up to 15 investors, majority can appoint or change operator. Family / club deals.
Cayman Funds · 2026 figures
- Assets under management
- $5+ trillion
- Registered Mutual Funds
- ~12,700
- Registered Private Funds
- ~17,200
- Share of global hedge funds
- 60%+
- Share of crypto hedge funds
- 58%
- CIMA fees · Mutual Fund
- $4,268 registration
- CIMA fees · Private Fund
- $4,268 registration
- Annual fees
- $4,268 / year
- Audit
- Big-4 required (Mutual)
Fund launch
From idea to first closing —
5 phases
Realistic fund launch timeline — 3–5 months. Longest phases: PPM negotiation with investors and bank/administrator onboarding. We actively manage the project through all stages.
1
Phase I · Weeks 1–2
Structuring
Strategy analysis, form selection (ELP / SPC / Foundation), feeder jurisdiction, tax transparency.
2
Phase II · Weeks 2–6
Fund documents
PPM (Private Placement Memorandum), Subscription Documents, Investment Management Agreement, NAV Policy.
3
Phase III · Weeks 4–8
Service providers
Selection and onboarding of administrator, custodian, auditor (Big-4), MLRO/DMLRO/AMLCO. Banking introduction.
4
Phase IV · Weeks 6–12
CIMA registration
Submission via REEFS portal: M&A, PPM, director KYC, fit & proper, certified resolutions.
Service providers
Who every
regulated fund works with
A regulated Cayman fund must appoint at least four service providers. We have direct relationships with the top-10 administrators, all Big-4 firms and five licensed MLRO firms.
Fund Administrator
NAV calculations, regular reporting, investor KYC, AML. CIMA-licensed. Partners: Apex, MUFG, IQ-EQ, Citco, Trident Trust, Maples.
Custodian / Prime Broker
Custody of fund assets. For hedge funds — prime broker (Goldman, JP Morgan). For crypto — Coinbase Custody, BitGo, Fireblocks, Anchorage.
Auditor (Big-4)
Required for Registered Mutual Funds. Annual audit under IFRS / US GAAP. PwC, KPMG, EY and Deloitte have local offices in George Town.
MLRO / DMLRO / AMLCO
Money Laundering Reporting Officer, deputy and compliance officer. All three positions must be appointed and approved by CIMA. Local providers.
Legal counsel
Cayman counsel supporting the fund. Drafting the PPM, Side Letters with investors, handling CIMA inspections.
Independent Directors
One or two independent directors with CIMA Director Registration. Best practice — 3 directors (2 independent).
FAQ
Fund launch —
no guesswork
What is the minimum AUM needed for a Cayman fund?
+
Legally — none. Economically — for a Mutual Fund it makes sense at $10M+ AUM (covers $80–120k annual costs for administrator, audit, directors). For Private Fund — $5M+, no Big-4 audit requirement. For Limited Investor Fund (≤15 LP) — even $1–2M is viable.
How long does actual CIMA registration take?
+
CIMA registration after REEFS submission — 5–7 business days. The long part is document prep (PPM, IMA, AML policies), administrator and auditor onboarding, bank account opening. Realistic timeline for a fully operational fund — 3–5 months.
Can a fund accept crypto as subscription?
+
Yes, with caveats. Administrator must support crypto subscriptions (not all do). Requires enhanced KYC on crypto wallets (chain analysis, source of wealth). Most administrators convert crypto subscriptions to USD immediately. Self-custody usually forbidden — need third-party custodian.
Do crypto funds need VASP license?
+
Not the fund itself — crypto fund under MFA/PFA automatically exempt from VASP Act if crypto activity is incidental to fund operations. But if the fund provides custody to third parties or operates as exchange — VASP License Phase 2 required. See VASP/Crypto section.
What is typical TER (fund expenses) in year one?
+
Setup costs: $35–55k (legal prep + CIMA + first administrator setup). Annual operating: $80–150k for Mutual Fund (Big-4 audit + administrator + 3 directors + MLRO + CIMA fees). Private Fund — $50–90k (no audit). At $20M AUM this gives 0.5–0.8% TER, market-competitive.
Launching a fund?
Start with the structure
Describe your strategy and target AUM — we will send an optimal structure with stages, timelines, and cost breakdown. Under NDA, no obligations.