Last year, the Mauritius International Financial Centre (IFC) introduced the Variable Capital Companies (VCCs) Act. VCCs are a new type of vehicle that complement the available type of funds structuring in Mauritius. Investor’s Mag met with the founders of ONS Finserv Ltd, the first company in Mauritius to incorporate a VCC.
Established in 2022, in its first year of operations, ONS Finserv Ltd is a management company regulated in Mauritius with a presence in UAE and Singapore. The company provides a range of services, including fund services and corporate, administrative, and global business solutions, in seven jurisdictions. They are subject matter experts in all types of funds, capital market solutions, securitisation transactions ; deal and transaction advisory.
Srishti Dixit, the founder and Managing Director of ONS Finserv Ltd, tells Investor’s Mag that the company was created with the goal of modernising and innovating the fiduciary and financial services industry. “We are guided by our principles of transparency, accountability, timeliness, and confidentiality, and we are committed to maintaining our clients’ trust in us by maintaining the highest level of service quality in the industry,” she says. “Our clients’ experience is designed with intelligent effort and continued meticulousness,” she adds.
Our clients’ experience is designed with intelligent effort and continued meticulousness…
Srishti Dixit | Founder and Managing Director | ONS Finserv Ltd
ONS, in keeping with their innovation outlook, became the pioneer management company in Mauritius in obtaining the licensing of the first VCC on the island by the Financial Services Commission (FSC). “ONS is always excited to delve into innovative and better solutions. Variable Capital Company (VCC) came as one such opportunity in Mauritius in 2022, second only to Singapore in this service”, explains Group CEO and co-founder Ashwanee Ramsurrun. “The first movers’ milestone can only be achieved when the team possesses a thorough understanding and practical applications of the structure. We bring complete knowledge-backed solutions to clients. Our products and services are sophisticated and end-goal-oriented. We provide VCC solutions in both jurisdictions that are available in the world in present times. We are extremely grateful for the contribution of our team in achieving the organisation’s vision. Ms Yuveena Mungra, a member of senior management, was instrumental in the VCC application process and was successful in bringing it to fruition”, adds the Group CEO.
He explains that a VCC offers a structure for funds to conduct business via one or multiple sub-funds or Special Purpose Vehicles (SPVs). “Each sub-fund or SPV may opt to have a legal personality distinct from the VCC, allowing it to remain segregated and incur liability on its own, thus ensuring ring-fencing of the assets and liabilities of each sub-fund or SPV in case of insolvency”, he adds.
A VCC Fund is comparable to a Protected Cell Company or an umbrella fund. However, a VCC Fund can accommodate collective investment schemes (CIS) and/or closed-end funds (CEF) under one structure. For example:
- A sub-fund may be structured as a CEF with a fixed committed capital/corpus. Investors generally do not have the right to call for their shares to be redeemed, whether at the option of the investor or the sub-fund. The sub-fund may have a limited life. Assets are distributed to investors on the winding up of the sub-fund.
- A sub-fund may also be structured as a CIS (also referred to as an open-end fund), which has variable capital. Investors are generally allowed to redeem their shares at predetermined times in accordance with the sub-fund’s constitutive documents. The net asset value (NAV) is usually calculated daily, weekly, monthly, or fortnightly.
We bring complete knowledge-backed solutions to clients. Our products and services are sophisticated and end-goal-oriented…
Ashwanee Ramsurrun | Group CEO and Co-founder | ONS Finserv Ltd
Ashwanee Ramsurrun, Group CEO and co-founder, argues that VCC is a game-changing framework that has the potential to make other frameworks obsolete. He praises its flexibility, noting that it can accommodate several Special Purpose Vehicles (SPVs) operating as vehicles ancillary to a sub-fund or the VCC Fund, provided that the SPVs do not operate as a fund. “These sub-funds and/or SPVs can have a separate legal personality from that of the VCC, and a single Global Business Licence will be required by the VCC regardless. Furthermore, a VCC can appoint a single CIS manager, custodian, or other service providers for all its sub-funds. Still, nothing prevents a sub-fund from appointing a separate CIS manager, custodian, or other service providers for all its sub-funds. Additionally, one sub-fund can interact with other sub-funds. Fund managers worldwide are recognizing the advantages of the VCC framework, which is growing in popularity”, he says.
At her launch event speech last year, Srishti Dixit said, “Our goal is to not only be the most reliable service providers but also to contribute to the growth of the Mauritian economy.” A year later, she remains steadfast and insists that ONS is here to support and assist the vision of IFC for Mauritius as the leading financial hub in the region.
The founder and Managing Director of ONS went on to praise the authorities for introducing revolutionary business solutions and structures on the island. Srishti Dixit noted that the introduction of the VCC framework is a major step forward in maintaining Mauritius’ status as a financial services hub.
She used Singapore as an example, pointing out that since the VCC framework was launched in 2020, the country has seen a huge influx of business and has registered over 660 VCCs in a short time. Mauritius offers a VCC framework that is more flexible and cost-effective than the Singaporean jurisdiction, which could greatly benefit fund managers around the world. As the second jurisdiction to provide VCCs, Mauritius is well-positioned to revolutionise the fund management industry. “We are proud to possess the expertise and understanding to implement the framework, and we are working towards bringing global acknowledgment to it. We are excited to be a part of this industry in these times when our vision and mission align with those of the industry and country leaders”, says Srishti Dixit.