The Variable Capital Company: What It Is And How It Works?

The Variable Capital Company: What It Is and How It Works?

This piece explains, in plain terms, what a Variable Capital Company (VCC) is, how it is proposed to work in India’s International Financial Services Centre (IFSC), and why it is being discussed at this stage. We would welcome comments, questions and practical views from readers on the VCC framework. You may write to us on: [email protected]

If you run a privately pooled fund in India today, you have probably run into the limits of the structures currently available. A trust, a company or a limited liability partnership can each house a fund, but none was built for one, and each leaves a gap. In a company, capital cannot move freely; returning it to investors needs a court-approved reduction or a limited buy-back. Further, none offers statutory ring-fencing for multiple strategies under one roof: protection between schemes rests on contract, not on the statute itself. This is felt most acutely when Indian fund