Deal-by-Deal Investment, to invest in unlisted companies and startups.
Holding Entity, for holding illiquid assets (such as fine art or yachts).
SPVs can either set up as a standalone entity, structured as a company, or as part of an umbrella structure, with one 'cell' (Segregated Portfolio) serving as a virtual SPV.
Comparing SPVs and SPCs:
The advantages of setting up a standalone SPV include:
Cost (at Formation): A standalone entity will be cheaper on an individual basis as compared to an umbrella structure.
Branding: A Segregated Portfolio ("SP") is required to be referred to in conjunction with the SPC structure (e.g. Global Ventures SPC acting solely for the account of PropTech UK SP).
Ease of Ownership Transfer: As a SPV is a standalone entity, the management/equity ownership of the structure can be easily transferred to a third-party (whereas SPs are ultimately attached to the SP).
The advantages of setting up a Segregated Portfolio Company ("SPC")include:
Cost (in terms of Multiple SPs): The setup of the SPC will initially be more expensive than setting up a standalone SPV. However, in the case of multiple SPs, there are immense savings (in terms of Cayman Islands-level disbursements, such as the Registered Office, Registered Agent and the Cayman Islands General Registry fees).
Timeline: The setup of a SPV will take around 1–1.5 calendar weeks, whereas a SP can be formed rapidly in hours or half a day via a written resolution.
Operational Efficiency: Managing many standalone SPVs can be operationally challenging (and expensive). With a SPC structure, the administrative & governance-related actions can be centralised.
Scaling: On balance, from a costs (across multiple SPs) and timeline perspective, a Segregated Portfolio Company will allow SPC managers to rapidly scale and grow their operations.
In conclusion, if the SPV is to be used for a new venture or a limited number will be set up, standalone may be suitable.
However, where multiple SPVs are contemplated or the Sponsor/SPC Manager has aggressive or exponential growth plans, a SPC may prove to be interesting.