Documents required for ADGM funds

Launching a collective investment vehicle on Al Maryah Island unlocks access to Abu Dhabi’s sovereign institutions, a rapidly maturing private‑wealth base and a legal environment that mirrors English common law. Yet every opportunity comes with paperwork. The Financial Services Regulatory Authority, together with the ADGM Registration Authority, requires comprehensive documents before it approves a fund.

This article unpacks the documents required for ADGM funds, explains why each item matters, highlights common drafting errors and outlines how those papers interact with ongoing governance duties. By the end, sponsors will understand how to weave narrative, risk disclosure and legal precision into a submission that wins swift regulatory consent and inspires investor confidence.

Going over the ADGM and documents required for funds

Abu Dhabi Global Market has spent less than a decade cultivating an asset‑management ecosystem, yet today hosts feeder funds for Gulf sovereigns, venture‑capital pools that back MENA tech start‑ups and Sharia‑compliant private‑credit strategies. Reasons echo across the industry: common‑law courts, zero corporate tax, unrestricted foreign ownership, free repatriation of capital and an English‑speaking regulator with transparent rulebooks. Crucially, ADGM recognises both Domestic Fund Managers and External Fund Managers, allowing promoters in the Cayman Islands, Luxembourg or Singapore to house a MENA‑facing fund within the ADGM while maintaining their home licences.

Two structural families, multiple variants

ADGM legislature offers two foundational shapes, each of which can become open‑ended or closed‑ended, professional or retail:

Investment companies, established under the Companies Regulations, where shares represent participation.
Limited partnerships, formed under the Partnership Act, where limited partners contribute capital while a general partner takes responsibility for management.

Investment trusts are deliberately excluded from the credit‑fund genre, though they remain viable for other strategies. Whether company or partnership, the ADGM filing bundle requires around four primary documents. These include a Private Placement Memorandum, a Subscription Agreement, an Investment Management Agreement and a Fund Constitution (or Limited Partnership Agreement). Ancillary items, director consent letters, service‑provider contracts, legal opinions, complete the package.

Launching a fund in ADGM requires submitting key documents including a Private Placement Memorandum (PPM), Subscription Agreement, Investment Management Agreement (IMA), and Fund Constitution or Limited Partnership Agreement.

Private Placement Memorandum, the narrative spine

Purpose and legal status

The PPM is the definitive marketing document for professional investors. ADGM rules treat it as a contractually binding statement; misleading or omitted information exposes directors and the fund manager to liability. The FSRA reviews the draft closely for fair presentation and risk balance.

Core sections

A well‑constructed memorandum opens with a summary of the offer, describing vehicle type, target size, minimum subscription and dealing mechanics. An investment objective comes next: for example, “to generate double‑digit internal rates of return by offering senior secured loans to mid‑market companies across the GCC.” Specific strategy language should follow, detailing sector focus, ticket size, collateral, origination channels and intended leverage limits.

A granular risk factor chapter, usually the longest, covers macro‑economic shocks, borrower default, illiquidity, valuation uncertainty, regulatory change, currency fluctuations and, for partnerships, capital‑call risk. The FSRA checks risk order and emphasis against the strategy narrative; omitting cyber or key‑person risk when the model depends on proprietary algorithms will draw queries.

The PPM then profiles the promoters, portfolio managers and key individuals, listing career history, qualifications and any past regulatory sanctions. That section segues into service providers, naming custodian, administrator, auditor, legal counsel and, for credit funds, loan servicer and collateral agent. A clear fee schedule discloses management fees, performance allocations, hurdle rates, catch‑ups and fund‑level expenses.

Finally, a statutory notice asserts that units are offered via private placement, available only to Professional Investors as defined in FSRA rules, and not subject to retail protections. The document ends with an application form or refers to the separate subscription agreement.

Typical drafting mistakes

New sponsors often rely on templates from offshore jurisdictions and forget to align definitions with FSRA rule references. Another error is inconsistent leverage language between the PPM and the fund constitution. The regulator demands identical upper limits. A third misstep is exclusion of a valuation methodology for unquoted loans; ADGM guidance notes require explicit hierarchy and frequency.

Subscription Agreement, the contractual handshake

Substance over form

While placement agents sometimes call the subscription document a mere “application form,” it carries heavy legal weight. The investor affirms that they meet Professional Client thresholds, net assets of at least one million US dollars for individuals or five million for corporates, under penalty of rescission. The agreement specifies commitment size, wiring instructions, draw‑down notice periods for closed‑ended vehicles and cooling‑off waiver for professional clients, as retail cooling‑off does not apply.

Representations and warranties

Clauses cover anti‑money‑laundering declarations, acknowledgement of risks, understanding of gate provisions and acceptance that distributions may be in‑specie. Limited partners in a partnership also grant the general partner power of attorney to execute documents on their behalf.

Tail‑end closing

Subscription documentation sometimes repeats fee schedules to ensure enforceability, although cross‑referencing the PPM suffices. Lawyers should verify cross‑references after each editing round; mismatched clause numbers trigger regulator follow‑up.

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Investment Management Agreement, defining fiduciary roles

Why the agreement is essential even for internal managers

If the fund manager and the fund share common ownership, sponsors occasionally question the need for a formal IMA. The FSRA’s position is unequivocal: a signed document is mandatory to delineate powers, delegation rights and termination triggers. That clarity protects investors when principals change and supports enforceability of performance fees.

Key provisions

The IMA grants discretionary authority, within PPM limitations, to allocate capital, underwrite loans and reinvest proceeds. It sets reporting frequency, monthly factsheets, quarterly portfolio reviews, annual financial statements, and audit cooperation. It establishes fee mechanics, invoicing timeline and performance‑renewal protocol. Liability language usually follows the English law standard: the manager is liable for gross negligence, wilful default or fraud, but indemnified otherwise.

Conflicts and soft‑dollar disclosure

Where the manager may place brokerage through affiliated banks or benefit from research rebates, these practices must appear in the IMA and match PPM wording. Failure in alignment is among the most common “notification of intention to refuse” letters issued by the FSRA.

Fund Constitution or Limited Partnership Agreement, the rulebook

Component hierarchy

For an investment company, the constitution complements the ADGM Companies Regulations. It sets out share classes, voting rights, dividend policy and wind‑up procedure. For a limited partnership, the LPA is even more pivotal, defining capital calls, excuse rights, claw‑backs, GP removal and no‑fault dissolution.

Closed‑ended nuances for credit funds

Because ADGM credit funds must be closed‑ended with maximum ten‑year life, constitutions need a structured draw‑down and return‑of‑capital schedule. During drafting, lawyers must ensure that leverage covenants reflect the regulatory cap of 10 per cent of net asset value across all finance lines.

"Ancillary documents such as service provider agreements, legal opinions, and consent letters from directors are also required, alongside consistent cross-referencing."

Supplementary documents rounding out the pack

Seed investor side letters explaining any fee discounts or co‑investment rights, annexed to the PPM for transparency.
Administrator service agreement specifying valuation responsibility, NAV calculation cut‑offs and error‑correction thresholds.
Custody or prime‑broker contracts when the strategy involves listed securities or derivatives.
Loan‑servicing agreement for credit strategies, clarifying collection, covenant monitoring and security‑perfection processes.
Legal opinion from ADGM counsel confirming that the fund structure and offer documents comply with FSRA Fund Rules and Companies Regulations.
Director and officer consent letters acknowledging duties under ADGM law and confirming absence of disqualifying events.

Common regulator queries during document review

The FSRA Authorisation team focuses on coherence: do risk warnings reflect strategy complexity? Does the valuation policy align with International Financial Reporting Standards? Are stress‑testing procedures referenced? One repeated question concerns diversification, credit funds must limit exposure to any issuer or group to 25 per cent of net assets within a specified time. Sponsors should pre‑empt by inserting a numeric diversification schedule in both PPM and constitution. Another topic is liquidity management for open‑ended hedge funds, including swing pricing or redemption gates.

Time‑line from concept to approval

Pre‑application call: promoters outline fund thesis and legal structure; regulator flags potential issues.
Document drafting: six to eight weeks, involving lawyers, administrators and auditors.
e‑Portal submission: upload PPM, constitution, service contracts and directors’ personal forms.
Initial completeness check: ten business days.
Substantive review: four to six weeks; expect two feedback rounds.
In‑principle letter: subject to entity incorporation, office lease and capital deposit.
Final approval and registration number: within five days of evidence submission.
Total duration averages fourteen to eighteen weeks.

Post‑launch obligations linked to core documents

Annual PPM refresh

Any material update triggers filing of a revised memorandum and investor notice within fourteen days.

Audited accounts

Dispatched to investors and FSRA within four months of financial year‑end, referencing valuation principles stated in the PPM.

Material change notification

Alterations to leverage, fee structure or redemption frequency require at least 30‑days prior investor consent and regulatory sign‑off. Constitutions and IMAs must be amended accordingly.

Aligning documents with Economic Substance Regulations

Although funds themselves fall outside UAE ESR, the fund manager is a distribution and service centre and must demonstrate adequate substance. Board minutes, which are evidence in ESR audits, should reference the fund documents when approving strategy pivots or side‑letter terms, proving that strategic decisions occur in the UAE.

Digital‑asset strategies and future documentation trends

The FSRA’s crypto‑asset framework permits funds to invest in recognised tokens. A digital‑asset hedge fund in the ADGM therefore adds wallet‑custody agreements and cyber‑security clauses to the suite.

"Expect future ADGM guidance to require explicit coin‑lending and staking disclosures in PPMs and to reference licensed Virtual Asset Custodians."

Tips for friction‑free drafting

Align definitions

Use exactly the terms found in the Fund Rules, for example “Professional Client,” “Exempt Fund” or “Net Asset Value,” to avoid clarification rounds.

Cross‑check leverage

Ensure numbers in risk factors, fee illustrations and covenants match.

Localise legal boiler‑plate

Replace Cayman citations with ADGM Companies Regulations and FSRA Fund Rules.

Evidence service‑provider due diligence

Append letters of engagement that include regulatory history and insurance limits.

Incorporate ESG policy

Institutional allocators increasingly demand a section outlining exclusion lists and engagement.

Turning paperwork into a marketing asset

The documents required for ADGM funds are more than a compliance hurdle; they are the shop window through which sophisticated investors judge professionalism. A concise, transparent and internally consistent PPM persuades allocators that governance matches ambition. A robust constitution demonstrating downside protection comforts investment committees. And a carefully negotiated IMA clarifies fiduciary duty, reducing future disputes. In short, meticulous documentation is both a regulatory imperative and a commercial differentiator.

By mastering each layer, fund promoters build vehicles capable of attracting regional capital, forging global distribution alliances and thriving under the watchful yet supportive eye of the FSRA.

Fund Constitution (or LPA) defines structural elements such as share classes, voting rights, clawbacks, GP powers, and must reflect leverage and diversification rules.
Ancillary documents such as service provider agreements, legal opinions, and consent letters from directors are also required, alongside consistent cross-referencing.
The FSRA typically completes the review process within 14–18 weeks, following two feedback rounds, and assesses document alignment, risk disclosures, and governance.
Post-launch, funds must update the PPM on material changes, file annual audited accounts, and ensure fund manager compliance with UAE Economic Substance Regulations.

Aston VIP, your documentation partner in Al Maryah Island

Drafting an ADGM‑compliant PPM or Limited Partnership Agreement demands far more than cut‑and‑paste legalese; it requires fluency in FSRA interpretation notes, cross‑referencing with Companies Regulations and an instinctive sense for the details that investors scrutinise. Aston VIP blends regulatory insight, fund‑structuring experience and plain‑English communication to turn technical requirements into compelling narratives.

Once you get into touch with us, our team prepares every line of the Private Placement Memorandum, tailors subscription agreements to your investor base, reconciles IMA clauses with performance‑fee objectives and liaises directly with the FSRA to expedite feedback cycles. We also coordinate administrator onboarding, draft policies for valuation, leverage and ESG, and run director workshops so that governance minutes dovetail with Economic Substance expectations. In short, Aston VIP converts document complexity into launch‑day confidence, leaving you free to focus on sourcing deals and generating returns.