Investment Fund Series - Exempted Limited Partnership

In our previous articles, we considered several fund issues in the context of open-ended funds (such as redemptions, redemption runs and gateway provisions). In the Cayman Islands, the most common vehicle for the use of close-ended funds is an exempted limited partnership (ELP) registered under and governed by the Exempted Limited Partnership Act, 2021 Revision (the ELP Act).

The key features of an ELP, in the context of fund disputes, are: (a) the ELP itself has no separate legal personality (akin to a trust); (b) all management responsibility vests in the general partner(s) (GP); (c) limited liability for the limited partners (LPs), except in narrow circumstances; and (d) inviolable duty of the general partner to act in good faith. Like a fund's articles of association, the ELP's limited partnership agreement (LPA) sets out the respective rights and obligations of the GP and the LPs and will be construed in a manner consistent with the parties' intention