Structuring a first cross-border allocation

The investment thesis is usually the easy part. The structuring questions decide whether the mandate survives its first year.

Custody comes first

Who holds the assets, in which legal entity, and under which jurisdiction's insolvency regime? A structure that is tax-efficient but relies on a custodian the client cannot monitor is not efficient.

Reporting currency

If the spending currency differs from the asset currency, someone must own the translation. Decide whether the mandate reports in the spending currency with hedging, or in the asset currency with an explicit translation line.

The holding vehicle

Direct ownership, a holding company, or a fund vehicle each change the reporting obligation, the audit requirement and the exit route. Choose the vehicle for the exit, not only for the entry.

A practical checklist

• Signed mandate and delegation matrix
• Custodian agreement and reporting format agreed before funding
• Currency policy written into the IPS
• Capital call calendar aligned with liquidity sources

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