{"id":111992,"date":"2025-09-11T09:26:39","date_gmt":"2025-09-11T09:26:39","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=111992"},"modified":"2025-09-12T15:24:56","modified_gmt":"2025-09-12T15:24:56","slug":"ghana-alternative-investment-funds","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/ghana-alternative-investment-funds\/","title":{"rendered":"Ghana: Alternative Investment Funds"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-111992","comparative_guide","type-comparative_guide","status-publish","hentry","guides-alternative-investment-funds","jurisdictions-ghana"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Stafford Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/08\/STAFFORD-LAW.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Stafford Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/08\/STAFFORD-LAW.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Alternative Investment Funds laws and regulations applicable in Ghana<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal legal structures used for Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The\u00a0typical and required legal structure for Alternative Investment Funds (AIFs) in Ghana is a Limited Liability Company (LLC), as regulated under the Companies Act, 2019 (Act 992) and licensed under the Securities Industry Act, 2016 (Act 929) (as amended) and the Securities &amp; Exchange Commission (SEC) Private Funds Guidelines (SEC\/GUI\/002\/04\/2018), Unit Trusts and Mutual Fund Regulations, 2001 (L.I. 1695) and Securities Industry (REITS) Guidelines 2019 (SEC\/GUI\/001\/01\/2019).<\/p>\n<p>Ghana does not currently permit Limited Partnerships or trust-based fund structures for private funds due to the lack of enabling legislation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a structure provide limited liability to the investors? If so, how is this achieved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, through the Limited Liability Company (Private Limited Company) regulated by the Companies Act, 2019 (Act 992) under which the AIF operates, it provides limited liability to shareholders (investors).<\/p>\n<p>Such a company is recognised as a distinct legal entity, separate from its shareholders (investors). It has the capacity to own property, hold assets, and initiate or defend legal proceedings in its own name. The personal assets of its shareholders (investors) remain protected from the company\u2019s debts and liabilities, except to the extent of any unpaid amounts on their shares. This means that, in the event of liquidation, an investor would only be required to contribute toward the company\u2019s debts, to the extent of their unpaid share capital, if their shares have not been fully paid for.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a market preference and\/or most preferred structure? Does it depend on asset class or investment strategy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, the Private Limited Company dominates as the preferred legal structure, due to lack of enabling legislation for other structures. To facilitate the return of capital from exit proceeds, AIFs use predominantly debt and\/or quasi-debt instruments in their capital structures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the regulatory regime distinguish between open-ended and closed-ended Alternative Investment Funds (or otherwise differentiate between different types of funds or strategies (e.g. private equity vs. hedge)) and, if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Although both fall under \u201cprivate funds\u201d and licensed under the same SEC Private Funds Guidelines, they are distinguished based on their structure, liquidity mechanics, investor rights, and market behaviour. For instance, open-ended funds are characterised by their ability to continuously issue new shares to investors and repurchase or redeem shares from existing shareholders (investors), however, closed-ended funds can only issue a fixed number of shares, and may not redeem its shares directly from the shareholders (investors).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any limits on the manager\u2019s ability to restrict redemptions? What factors determine the degree of liquidity that a manager offers investors of an Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, a manager\u2019s ability to restrict redemptions is subject to regulations and full disclosure in the offering document as well as compliance with the Securities Industry Act, 2016 (Act 929) as amended and the SEC Guidelines. Additionally, any document to be published in this respect is subject to SEC approval. Retroactive restrictions are not allowed.<\/p>\n<p>The degree of liquidity offered to investors is determined by the fund type, structure, regulatory requirements and other commercial factors. For instance, private equity funds which focus on long-term illiquid investments will have low liquidity, and the fund manager\u2019s ability to offer liquidity is usually limited by successful portfolio exits. Hedge funds or hybrid fund are able to offer periodic liquidity with periodic lock-ups. Also, the type of asset (publicly traded securities or real estate) may limit the ability to meet redemptions thereby restricting the degree of liquidity offered to investors.<\/p>\n<p>Liquidity terms and conditions are however explicitly stated in the fund\u2019s constitution or subscription agreement. They must be consistent with the fund\u2019s investment strategy, transparent, fair to all investors and aligned with the SEC\u2019s guidelines and other relevant regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are potential tools that a manager may use to manage illiquidity risks regarding the portfolio of its Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Fund managers may use globally recognisable risk management tools such as diversification by asset liquidity, co-investment structures, suspension of redemptions, capital call mechanism, fund-on-fund layering, among others. These tools must however be in alignment with Ghanaian regulations, particularly Act 929 and the SEC Guidelines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on transfers of investors\u2019 interests?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, transfers of shares in Private Limited Companies are generally restricted under Act 992 and subject to control measures by the SEC and other relevant government agencies to preserve control over the investor base and to ensure compliance with anti-money laundering (AML) laws and \u2018fit and proper\u2019 standards.<\/p>\n<p>Some of the restrictions are manager and\/or directors and shareholders (investors) consent, limit to the total number of investors, right of pre-emption of existing shareholders (investors) and SEC reporting oversight. These controls may be captured in the fund\u2019s constitution, subscription agreement or shareholders (investors) agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other limitations on a manager\u2019s ability to manage its funds (e.g., diversification requirements)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there are limitations designed to protect investors and ensure the integrity of the financial system. There are requirements relating to diversification, conflicts of interest, investor concentration and disclosure which vary depending on the type of fund, i.e., whether open-ended or closed-ended. Venture capital and private equity funds generally set these limitations based on their investment strategy while CIS have limitations based on regulation and risk management. These limitations may therefore be regulatory, embedded in the fund\u2019s governing documents or enforced by the SEC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the local tax treatment of (a) resident, (b) non-resident, (c) pension fund and (d) sovereign wealth fund investors (or any other common investor type) in Alternative Investment Funds? Does the tax status or preference of investors or the tax treatment of the target investments primarily dictate the structure of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The tax treatment of an AIF and its investors in Ghana depends largely on the type of fund and if fund is registered as a venture capital fund under the Venture Capital Trust Fund Act, 2004 (Act 680). Funds registered under Act 680 enjoy several incentives:<\/p>\n<ol style=\"padding-left: 0\" type=\"I\">\n<li>Annual relief from stamp duty on subscriptions for new equity investments in venture capital funds.<\/li>\n<li>Interest and dividends from investments in a venture capital company are taxed at a reduced rate of 1% for the first ten years of assessment.<\/li>\n<li>Chargeable income of a venture capital company is taxed at 5% for the first ten years of assessment.<\/li>\n<\/ol>\n<p>Further, the interest or dividend paid or credited to a holder or member on an investment in an approved unit trust scheme or mutual fund is exempt. The income of an approved unit trust scheme, mutual fund or REIT.<\/p>\n<p>For AIFs not registered under Act 680, standard tax rules apply, with treatment varying based on the investor\u2019s tax residency status as follows:<\/p>\n<p>(A) Resident investors (unless exempted) ;<\/p>\n<ul style=\"padding-left: 0\">\n<li>dividends\u2013 8% withholding tax<\/li>\n<li>interest income \u2013 8% withholding tax<\/li>\n<li>fund distributions \u2013 treated as ordinary income or capital, depending on fund structure.<\/li>\n<li>capital gains from exit \u2013 taxed as income for individuals and at corporate rate of 25% for companies<\/li>\n<\/ul>\n<p>(B) Non-resident Investors (unless a Double Tax Agreement applies)<\/p>\n<ul style=\"padding-left: 0\">\n<li>dividends \u2013 8% withholding tax<\/li>\n<li>interest income \u2013 8% withholding tax<\/li>\n<li>fund distributions \u2013 characterised based on underlying income (e.g. interest, dividend, capital gains, etc)<\/li>\n<li>capital gains from exit \u2013 15% tax<\/li>\n<\/ul>\n<p>(C) Pension Fund Investors &#8211; These comprise of investors in AIFs regulated under the National Pensions Act, 2008 (Act 766) i.e. Social Security and National Insurance Trust (SSNIT), and Tier 2 &amp; 3 private pensions schemes, licenced by the National Pensions Regulatory (NPRA).<\/p>\n<ul style=\"padding-left: 0\">\n<li>all investment income of pension funds \u2013 tax exempted<\/li>\n<li>capital gains, interest, dividends \u2013 tax exempted by a qualifying pension fund<\/li>\n<li>fund distributions \u2013 exempt if attributable to exempt income.<\/li>\n<\/ul>\n<p>(D) Sovereign Wealth Funds (SWF)<\/p>\n<ul style=\"padding-left: 0\">\n<li>Ghanaian state funds \u2013 may qualify for exemption or preferential tax treatment based on enabling legislation<\/li>\n<li>Foreign SWFs \u2013 subject to standard non-resident tax rates (15% on capital gains and 8% WHT on interest income and dividends).<\/li>\n<\/ul>\n<p>(E) Charities\/Non-Governmental Organisations\/ Development Finance Institutions<\/p>\n<p>May qualify for tax exemption (1) if registered as a charitable organisation and income is solely used for charitable purposes; or (2) based tax incentives and exemptions in tax treaty or multilateral agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rights do investors typically have and what restrictions are investors typically subject to with respect to the management or operations of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The rights and restrictions are typically that given to and imposed upon shareholders (investors) under Act 992 and the SEC guidelines as well as those stated in the fund\u2019s offering and governing documents.<\/p>\n<p>They typically include; economic rights, right to information and reporting, voting rights, visitation rights (subject to reasonable notice), consent\/veto rights for major decisions, transfer rights, first refusal rights, among others.<\/p>\n<p>The restrictions include limited operational control, transfer restrictions, confidentiality obligations, non-interference, tax and regulatory compliance, among others.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where customization of Alternative Investment Funds is required by investors, what types of legal structures are most commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The legal structure would be a Private Limited Company, however the company constitution may be used to capture the customization needed by the investors. The fund agreement can also be used to achieve this goal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are managers or advisers to Alternative Investment Funds required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The legal structure would be a Private Limited Company, however the company constitution may be used to capture the customization needed by the investors. The fund agreement can also be used to achieve this goal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are Alternative Investment Funds themselves required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, AIFs are licenced under the Private Funds Guidelines (SEC\/GUI\/002\/04\/2018) Unit Trusts and Mutual Fund Regulations, 2001 (L.I. 1695) or Securities Industry (REITS) Guidelines 2019 (SEC\/GUI\/001\/01\/2019) and regulated by SEC under the Securities Industry Act, 2016 (Act 929) (as amended).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the Alternative Investment Fund require a manager or advisor to be domiciled in the same jurisdiction as the Alternative Investment Fund itself?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, managers or advisors to funds domiciled in Ghana are required to be licensed and regulated by the SEC and generally required to be domiciled in Ghana. The managers are subject to SEC oversight if they manage or promote funds that operate in Ghana or solicit Ghanaian investors even if the funds are domiciled abroad. Foreign fund managers may only operate in Ghana if they act in partnership with or through an entity licensed in Ghana. In addition to this, the Fund Managers are required to maintain adequate compliance and disclosure mechanisms and align with governance and investor protection standards set by the SEC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there local residence or other local qualification or substance requirements for the Alternative Investment Fund and\/or the manager and\/or the advisor to the fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, local residence of the fund and the fund manager is required by the SEC. This is in the form of incorporation of the fund locally, licensing of the fund in Ghana, having a local office, at least one resident director, local residence of key personnel, maintaining a minimum capital, and compliance with governance obligations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What service providers are required by applicable law and regulation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A fund manager, custodian, auditors, legal advisors or compliance officers each with the appropriate license or permit issued by their respective regulators.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are local resident directors \/ trustees required?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, under the SEC Guidelines and Act 992. Fund Managers are typically incorporated entities which must have at least two (2) directors, one of whom must be resident in Ghana and both must pass the \u2018fit and proper\u2019 test. A trustee must also be licensed and regulated under Ghanaian laws.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rules apply to foreign managers or advisers wishing to manage, advise, or otherwise operate funds domiciled in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign managers or advisors are subject to strict regulatory requirements under the SEC Guidelines and Act 929 including:<\/p>\n<ul style=\"padding-left: 0\">\n<li>Local incorporation of a company<\/li>\n<li>SEC licensing as a fund manager\/adviser<\/li>\n<li>Local office and at least one resident director<\/li>\n<li>Independent local custodian of assets<\/li>\n<li>Ongoing regulation and supervision by the SEC (fit and proper test, reporting)<\/li>\n<li>Compliance and conduct standards<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the common enforcement risks that managers face with respect to the management of their Alternative Investment Funds?\u00a0<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The enforcement risks are mostly due to regulatory oversight and typically arise from failures in compliance, governance, investor protection, and financial management. The most common are:<\/p>\n<ul style=\"padding-left: 0\">\n<li>commingling client funds with company funds , unauthorised use of investor capital, or holding funds outside approved custodianship structures.<\/li>\n<li>failure to maintain minimum capital set by the SEC.<\/li>\n<li>non-compliance with licensing conditions.<\/li>\n<li>lack of proper disclosures\/misleading communications<\/li>\n<li>conflicts of interest not properly managed<\/li>\n<li>non-compliance with custody rules<\/li>\n<li>failure to file regulatory reports<\/li>\n<li>inability to meet investor redemption requests<\/li>\n<li>improper valuation of fund assets<\/li>\n<li>breach of investment mandates or limits<\/li>\n<li>failure to meet fundraising targets<\/li>\n<\/ul>\n<p>The SEC may revoke or suspend the fund manager\u2019s or fund\u2019s licence, impose administrative penalties, notify investors, or commence criminal action for fraud or misappropriation of funds or illegal fundraising.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the typical level of management fee paid? Does it vary by asset type?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Typically falls within the 0.5%-2.5% of AUM or committed capital. There is no statutory cap under Ghanaian law but SEC mandates that the fees should be disclosed, justifiable and aligned with investor expectations. The fees vary by asset type and fund class based on the complexity, risk, illiquidity, and effort required.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is a performance fee or carried interest typical? If so, does it commonly include a \u201chigh water mark\u201d, \u201churdle\u201d, \u201cwater-fall\u201d, \u201cpreferred return\u201d or other condition? If so, please explain.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, performance fees or carried interest are typical, with the carried interest being the most used. They often include conditions such as hurdle rates, high water marks, preferred returns and waterfall structures. These conditions help to protect investors and ensure that the manager (general partner) only earns based on their and the fund\u2019s performance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are fee discounts \/ fee rebates or other economic benefits for initial investors typical in raising assets for new fund launches?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Discounts and rebates are used strategically to attract initial commitments, signal confidence and to build momentum. The most common ones are management fee discounts which may be time-based fee discounts (3-5 years) or tiered discounts based on commitment size, carried interest or performance fee reductions, fee rebates or retroactive adjustments, or co-investment rights.<\/p>\n<p>The SEC mandates that all these economic incentives should clearly be disclosed in the offering memorandum and other relevant transaction documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are management fee \u201cbreak-points\u201d offered based on investment size?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes.\u00a0 This is to encourage larger commitments from investors; rewards scale and align fee structures with reduced marginal cost of managing larger capital amounts. There are two main types; investor-level break-points often used in closed-ended funds, and fund-level break-points which rewards economies of scale and avoids fee disparities among investors.<\/p>\n<p>Fee break-point must be clearly disclosed in offering documents and side-letters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are first loss programs used as a source of capital (i.e., a managed account into which the manager contributes approximately 10-20% of the account balance and the remainder is furnished by the investor)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>First-loss capital is often employed by catalytic or impact-driven investors, where a designated portion of invested capital is set aside to absorb initial losses before affecting other commercial investors. It is uncommon in Ghana for fund managers to provide the first-loss capital.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical terms of a seeding \/ acceleration program?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>These are relatively rarely used but are steadily gaining ground for early-stage startups particularly in venture capital and private equity ecosystems. The typical terms are:<\/p>\n<ul style=\"padding-left: 0\">\n<li>funding commitment<\/li>\n<li>innovative financing type of capital<\/li>\n<li>ownership stake<\/li>\n<li>revenue share\/profit share<\/li>\n<li>lock-up period<\/li>\n<li>preferred economic terms<\/li>\n<li>governance rights<\/li>\n<li>technical assistance, support and training<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What industry trends have recently developed regarding management fees and incentive\/performance fees or carried interest? In particular, are there industry norms between primary funds and secondary funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Industry trends are influenced by global norms. The key developments include:<\/p>\n<ul style=\"padding-left: 0\">\n<li>general fee compression; investors are pushing back on the \u201c2 and 20\u201d model and are now aligning with 1.75%-2% for primary PE\/VC funds on committed or invested capital and 1.0%-1.5% on secondary funds depending on the portfolio size.<\/li>\n<li>carried interest remains at 20% post-hurdle for primary funds and 10%-15% often without catch-up for secondary funds.<\/li>\n<li>Hurdle is usually around 8% IRR for primary funds, and 6%-8% or absent if upside is limited for secondary funds.<\/li>\n<li>custom economic terms\/negotiability; side letters and tailored terms<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restrictions are there on marketing Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Marketing and solicitation is strictly regulated by the SEC as follows:<\/p>\n<ul style=\"padding-left: 0\">\n<li>must have the appropriate license for fund promotion, both SEC licence and appropriate license for social media marketing;<\/li>\n<li>there should be no guarantees or specified returns;<\/li>\n<li>there should be full disclosure of risks and investment strategy;<\/li>\n<li>there should be compliance with KYC protocols and AML\/CFT regulations.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the concept of \u201cpre-marketing\u201d (or equivalent) recognised in your jurisdiction? If so, how has it been defined (by law and\/or practice)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>\u201cpre-marketing\u201d is not explicitly defined or formally recognised under Ghanaian laws. Any marketing should be done in accordance with the SEC guidelines and any marketing classified as \u201cpre-marketing\u201d must be carried out cautiously so as not to violate any existing laws. They are often labelled as \u2018non-binding and exploratory\u2019 and avoid detailed term sheet distribution before SEC approval.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can Alternative Investment Funds be marketed to retail investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, this is generally not permitted due to their complexity, risk profile and other regulatory restrictions. They are only acceptable if the fund is specifically structured and approved for retail distribution. In such situations, strict disclosure requirements and suitability assessments are mandatory.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a particular form of Alternative Investment Fund be that can be marketed to retail investors (e.g. a Long-Term Investment Fund or Non-UCITS Retail Scheme)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, there is no specific formally designed legal or regulatory form of AIFs tailored expressly for retail investors. The SEC currently regulates a collective investment scheme which operates under private placement exemptions targeting professional and institutional investors. Fund managers may market to retail investors using existing mutual fund\/ unit trust frameworks with full compliance to disclosure, liquidity and suitability requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the minimum investor qualification requirements for an Alternative Investment Fund? Does this vary by asset class (e.g. hedge vs. private equity)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The minimum requirements are;<\/p>\n<ul style=\"padding-left: 0\">\n<li>must be an accredited or qualified investor<\/li>\n<li>must be a high net worth individual (minimum of USD250,000)<\/li>\n<li>must be a sophisticated investor with relevant financial knowledge or experience<\/li>\n<li>must have a minimum investment threshold of USD 50,000 to USD 100,000 for private equity and hedge funds<\/li>\n<li>investors must demonstrate an understanding of the risks or meet financial criteria demonstrating the ability to bear losses.<\/li>\n<\/ul>\n<p>The minimum investor qualification varies by asset class.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there additional restrictions on marketing to government entities or similar investors (e.g. sovereign wealth funds) or pension funds or insurance company investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, their own regulatory framework and governance rules apply in addition to the SEC rules and guidelines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the use of intermediaries to assist in the fundraising process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there are restrictions and regulatory requirements governing the use of intermediaries in fundraising.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the use of \u201cside letters\u201d restricted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While not restricted or prohibited, it is not specifically regulated. Their use is subject to general principles of contract, full disclosures and regulatory compliance. It should be consistent with the fund documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any disclosure requirements with respect to side letters?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, all agreements are subject to full disclosures as exists under SEC regulations and guidelines although side letters themselves are not specifically regulated.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common side letter terms? What industry trends have recently developed regarding side letter terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common, which are consistent with global trends, are:<\/p>\n<ul style=\"padding-left: 0\">\n<li>fee discounts or waivers<\/li>\n<li>enhanced reporting rights<\/li>\n<li>liquidity or redemption terms<\/li>\n<li>key person provisions<\/li>\n<li>most favoured nation (MFN)clauses<\/li>\n<li>transfer rights and consent<\/li>\n<li>governance or advisory rights<\/li>\n<li>co-investment rights<\/li>\n<\/ul>\n<p>the recent industry trends include;<\/p>\n<ul style=\"padding-left: 0\">\n<li>increased focus on transparency and disclosure<\/li>\n<li>scrutiny of MFN clauses<\/li>\n<li>standardization and redemption side letters<\/li>\n<li>environmental and reduction side letters<\/li>\n<li>digital and data privacy clauses<\/li>\n<li>greater investor rights in uncertain markets<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3613<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/111992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=111992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}