Until recently, a Cayman company could only combine with another company by way of arrangement which required the parties involved to apply the Grand Court of the Cayman Islands for approval. 

The Certificate of Merger dated 3 August 2009 was issued by the Cayman Islands Registrar of Companies to Appleby's client and signifies the first CIMA registered mutual fund structure to make use of the Companies (Amendment) Law 2009. 

The new legislation makes a distinction between a consolidation and a merger. In a merger, one company remains as the surviving entity, having in effect absorbed the other merging parties that are then struck off and cease to exist. By comparison, in a consolidation, a new entity is formed from the combination of each participating company. The participating companies, as a consequence, cease to exist and are each struck off by the Registrar of Companies.

The funds lawyer involved with the transaction was associate Andre Ebanks.

Ebanks says: 'During these turbulent economic times, investment managers are constantly seeking ways to restructure their investments and the structures that lie beneath. This new legislation allows companies to combine without the need to go through a potentially costly court-driven process or, as Cayman mutual fund companies have done in the past, a somewhat cumbersome transfer process; involving a subscription-in kind, redemption, transfer of assets and the liquidation of the terminating fund. The provisions allow greater flexibility whilst providing clients with the benefit of reduced costs and time as the merger of the terminating fund and surviving fund is effected by operation of law.'