Introduction
Established under the Mutual Funds Act, a limited investor fund in the Cayman Islands is recognised as a regulated open-ended investment fund, which is typically designed for investment structures with a limited number of investors. This structure is highly suitable for family-style investment arrangements or closely held investment vehicles.
This type of fund allows sophisticated investors to pool capital and pursue diversified investment strategies while maintaining redemption rights. Unlike some other mutual fund structures in the Cayman Islands, a Limited Investor Fund excludes master funds and is generally used by smaller investor groups seeking an efficient and regulated investment framework.
In the majority of the cases, the fund vehicle is structured as a Cayman Islands limited liability company. With a corporate structure similar to Delaware LLC, the Cayman LLC is a flexible corporate structure that combines elements of both partnership and corporation. This allows members to benefit from limited liability while maintaining flexible governance arrangements.
The Cayman LLC structure is frequently used in investment fund structures and joint ventures, particularly where investors prefer a framework similar to a limited partnership but with the benefit of operating as a separate legal entity.
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