The Specific Mandate Alternative Regulatory Test Fund (SMART© Fund) was introduced under the Investment Funds Act, 2003 as an additional style of a collective investment vehicle. It was designed to provide industry with a new private wealth management tool with the flexibility to find application within areas not traditionally associated with investment fund administration.
The primary facility offered by the SMART Fund concept is an open architecture which allows practitioners to design innovative structures, akin at times to special purpose vehicles, without reference to inflexible regulatory criteria predefined in legislation.
Where Investment Funds essentially are private arrangements, they can now enjoy a supervisory environment appropriate for the limited, specific nature of the project and need not suffer the ‘broad brush’ regulatory approach. Whereas other jurisdictions only differentiate between public and private funds by criteria such as number of investors or value of minimum investment, applicants for a SMART Fund licence need only demonstrate to the regulator that the structure is an appropriate use of an Investment Fund, and in keeping with the best traditions of Bahamas financial services.
The SMART Fund is an innovative, progressive and flexible product designed to attract new business and re-organise existing business to better suit the needs of clients. It allows industry participants to provide clients with innovative structuring solutions via a regulated vehicle, domiciled in a premier international financial centre. This Guide provides examples of existing SMART Fund models and term sheets.