Offshore Investment Funds – Where’s Your COMI?

Originally published in The Lawyer, November 2007

While ensuring that an offshore investment fund is truly managed offshore has always been an important factor for tax reasons, in these times of turbulent markets the location of the management and administration of the fund is also becoming an important factor for worst-case scenario purposes and the possible liquidation of the fund.

The turmoil brought to world financial markets by the so-called "credit-crunch" has seen several recent cases of cross-border insolvency involving offshore investment funds come into the spotlight. Because these types of funds tend to be vehicles established in an offshore jurisdiction for tax neutrality reasons, but managed and sold to investors onshore, the obvious question is which jurisdictions law should be applied to the liquidation of the assets of the fund? The United States and England have both adopted the