Syndicates

A Syndicate is an SPV with a twist.

Like an SPV, a Syndicate is an entity or legal arrangement (often a company) launched to acquire and hold a single asset for long-term investment. Unlike an SPV, a Syndicate is spearheaded by a specific person (or team) – known as the ‘Lead’ – who brings a unique skillset to the investment opportunity and invites others to participate.

See our article on Syndicates for more information.

The Lead manages and controls the Syndicate. They hold all of the voting shares and are also typically appointed as a director of the Syndicate.

The Lead will responsible for the Syndicate’s activities related to fundraising (i.e. finding investors) and investments (i.e. finding deals). They will typically have:

• access to investors and deals through their personal or professional network; and

• specific industry knowledge that can be used to identify promising investments.

The Lead, through the Syndicate, allows their investors to access investment sectors and opportunities that the investors would otherwise never see and to participate in these with comparatively little effort. In return, the Lead typically receives a share of the total profits generated by the Syndicate, often called a performance fee, carried interest or simply ‘carry‘.

A Lead can be any person or entity. Depending on the specific terms of the Syndicate, however, the Lead may need to be regulated for fund management business (or equivalent) in their home country.

A Syndicate is typically used to:

• pool the contributions of investors and the profits from the Syndicate's portfolio investment; and

• allow the Lead (not the investors) to have day‑to‑day control over the management of the Syndicate's property.

This means a Syndicate will usually meet the definition of a 'collective investment scheme' and the person (or people) operating the Syndicate may be carrying on fund management business. Unfortunately, there is no straightforward answer here. Who should act as the Lead, and their specific legal, tax and regulatory obligations, will depend on their individual circumstances. This may require a detailed analysis by professional advisers.

Auptimate does not advise Leads on their regulatory obligations. As set out in our Standard Terms and Conditions, all users are recommended to engage their own independent legal counsel. Auptimate has relationships with a network of law firms (in Singapore and elsewhere) and can make referrals, if applicable.

If you would like to launch a Syndicate, but are unsure of your regulatory obligations, you may wish to consider launching an SPV instead. Investors in an SPV have day‑to‑day control over the management of the SPV's property, meaning the SPV Is not a 'collective investment scheme'.

Syndicates are used by a broad range of people for an even broader range of reasons. The below are a few examples of who uses Syndicates and why.

1. Individual Investors

   • To share a promising investment opportunity with their friends and wider network.

   • To diversify their portfolio by investing smaller amounts across a number of Syndicates.

   • To improve their negotiating position by making a larger investment than if investing on their own.

   • To increase their own returns on a successful exit with a performance fee.

2. Aspiring Fund Managers

   • To make initial investments, start building a track record and structure for easy transfers into a future fund.

   • To initiate discussions with potential investors and bring actual investment opportunities to the table.

   • To start earning ‘carry’ on successful exits.

3. Emerging and Established Fund Managers

   • To co-invest with other fund managers or other investors, e.g. in a follow-on investment.

   • To make an investment that falls outside their fund’s investment strategy (e.g. to avoid over exposure to a single investment).

4. Family Officers

   • To co-invest with other family offices or other investors and maximise returns for finding and inviting those others to an investment.

5. Financial Institutions and Institutional Investors

   • To retain decision-making over which deals to invest in, rather than relying entirely on a Fund Manager or other intermediaries.

   • To co-invest with others and maximise returns for finding and inviting others to an investment.

The AuptiSynd is a Syndicate created using Auptimate’s online structuring tool. It is:

• Customisable by the user.

• Unique to a specific user’s needs.

• Cloud-native with all documents automatically generated, signed and stored online.

• Launched online in a matter of minutes.

• Managed via Auptimate’s online platform.

Auptimate handles an AuptiSynd’s incorporation, legal documents, investor onboarding, administration, accounting, tax, compliance, investor communications and other back-office functions – all on Auptimate’s online platform. We give Syndicate Leads the peace of mind to focus on what they do best: invest.

AuptiSynds are typically formed as a private company limited by shares incorporated in Singapore. However, we work with customers who are interested in different types of entity, whether in Singapore or elsewhere in the world.