What are the advantages and disadvantages of choosing an umbrella VCC as a single fund vs one with multiple sub-funds?
It depends on the needs of the investor(s). Multiple sub-funds are more cost effective because the cost of setting up and maintaining a new sub-fund is lesser than setting whole new VCC structure. However, if a large investor prefers to have a single VCC set up as a fund for their own purposes, it is possible as well.
The Umbrella VCC structure allows the sub-funds to share a board of directors and have common service providers, such as fund manager, custodian, auditor, fund administrator, compliance agent and company secretary. Where a VCC is set up as an umbrella fund with several sub-funds, members may hold shares that are referenced to a particular sub-fund held by the VCC. Assets and liabilities of each sub-fund are segregated such that the assets of one sub-fund cannot be used to discharge the liabilities of another sub-fund, hence sub-funds can be established and operate with different investment strategies, investors and assets.