Navigating the ‘Grey’ Area

Being greylisted may increase due diligence requirements from investors, who may perceive a higher risk.

Fund managers need to consider their agreements and relationships with limited partners, particularly regarding drawdown notices and fundraising. This is especially pertinent for Development Finance Institution (DFI) investors, where greylisting may pose specific challenges.

Shelley LotzHead of Regulatory Affairs at SAVCA

There is a herd instinct in the movement of funds and structures from one jurisdiction to another based on regulatory attractiveness and cost-effectiveness.

Jurisdictions need to evolve in line with global regulations and industry trends to maintain the trust and business of fund managers.

Nienke MalanSenior Associate at Carey Olsen

Fund managers should consider a broader range of factors when choosing the optimal jurisdiction for their funds, including regulatory environment, political stability, ease of doing business, and reputation of the jurisdiction.

Regulatory authorities are also demanding more substance from companies. That is, it’s no longer enough to just have a registered address in a certain jurisdiction, but the management and decision-making of a company must actually take place there. Aspects like good schools, lifestyle, and connections to the rest of the world are now coming into play when deciding on a jurisdiction.

Shayne KrigeDirector and Co-Head of Investment Funds & Private Equity Practice at Werksmans Attorneys