Why an Umbrella Fund May be the Right Choice for Your Investment Firm.
09 February 2023 _ News
An Umbrella Fund is a type of investment vehicle that allows multiple Sub-Funds to operate under a single legal and organizational structure. This can be a beneficial option for Investment Managers and Advisors as it allows them to offer a diverse range of investment products to their clients, or to manage several clients under a same Sub-Fund efficiently and effectively.
Why Umbrella Fund is beneficial for Investment Managers & Advisors?
There are numerous reasons why an Umbrella Fund is beneficial for investment firms, below we discuss in detail the most important advantages.
One key advantage of an Umbrella Fund is that it allows for economies of scale. Pooling the assets of multiple Sub-Funds together can lead to lower operating costs. This can be especially beneficial for smaller investment firms that may not have the resources to set up and manage multiple standalone Funds.
One key advantage of an Umbrella Fund is that it allows for economies of scale. Pooling the assets of multiple Sub-Funds together can lead to lower operating costs. This can be especially beneficial for smaller investment firms that may not have the resources to set up and manage multiple standalone Funds.
In addition to cost savings, an Umbrella Fund also offers flexibility in terms of the types of investment products that can be offered. Investment Managers and Advisors can create a variety of Sub-Funds that cater to different investment strategies and asset classes, allowing them to meet the needs of a wider range of clients. This can be particularly useful for firms that want, for example, offer a range of socially responsible investment options, as they can create Sub-Funds that are focused on specific environmental, social, and governance (ESG) criteria.
Another advantage of an Umbrella Fund is that it allows for easier administration and management. As all the Sub-Funds are operating under a single legal and organizational structure, there is a single set of rules and regulations that need to be followed. This can make it easier for Investment Managers and Advisors to comply with regulatory requirements and ensure that all their investment products are being managed in a consistent manner.
There are also tax advantages to using an Umbrella Fund. In many countries, Umbrella Funds are taxed at a lower rate than standalone Funds, which can make them a more attractive option for Investment Managers and Advisors. Additionally, as the Sub-Funds within an Umbrella Fund are treated as separate entities, investors may have the ability to switch between Sub-Funds without incurring capital gains tax.
Conclusion
Overall, an Umbrella Fund can be a useful option for investment managers and advisors who want to offer a diverse range of investment products to their clients while still being able to operate efficiently. By pooling the assets of multiple Sub-Funds together, an Umbrella Fund can take advantage of economies of scale, offer flexibility in terms of the types of investment products that can be offered, and provide tax advantages to both the investment firm and its investors.
Pharus provides a personalized consultation in terms of your investments needs and objectives, to know more kindly e-mail us info@pharusmanco.lu.
Information message - The information in this message is produced for information purposes only and therefore does not qualify as offer or recommendation or solicitation to buy or sell securities or financial instruments in general, financial products or services or investment, nor an exhortation to carry out transactions related to a specific financial instrument.
The contents of this informative message are the result of the free interpretation, evaluation and appreciation of Pharus Asset Management SA and constitute simple food for thought.
Any information and data indicated have a purely informative purpose and do not in any way represent an investment advisory service: the resulting operational decisions are to be considered taken by the user in full autonomy and at his own exclusive risk.
Pharus Asset Management SA dedicates the utmost attention and precision to the information contained in this message; nevertheless, no liability shall be accepted for errors, omissions, inaccuracies or manipulations by third parties on what is materially processed capable of affecting the correctness of the information provided and the reliability of the same, as well as for any result obtained using the said information.
It is not permitted to copy, alter, distribute, publish or use these contents on other sites for commercial use without the specific authorization of Pharus Asset Management SA.
The contents of this informative message are the result of the free interpretation, evaluation and appreciation of Pharus Asset Management SA and constitute simple food for thought.
Any information and data indicated have a purely informative purpose and do not in any way represent an investment advisory service: the resulting operational decisions are to be considered taken by the user in full autonomy and at his own exclusive risk.
Pharus Asset Management SA dedicates the utmost attention and precision to the information contained in this message; nevertheless, no liability shall be accepted for errors, omissions, inaccuracies or manipulations by third parties on what is materially processed capable of affecting the correctness of the information provided and the reliability of the same, as well as for any result obtained using the said information.
It is not permitted to copy, alter, distribute, publish or use these contents on other sites for commercial use without the specific authorization of Pharus Asset Management SA.
RELATED CONTENTS
