The Segregated Portfolio Company (SPC) is a single legal entity that creates distinct "cells" or portfolios, offering statutory ring-fencing of assets and liabilities between them.
Statutory Ring-Fencing
Under Part XIV of the Companies Act, an SPC can create separate portfolios (e.g., Portfolio A and Portfolio B). If Portfolio A goes bankrupt due to bad investments, the creditors of Portfolio A cannot touch the assets of Portfolio B, nor the general assets of the core company.
Common Use Cases
- Multi-Strategy Funds: An umbrella fund running distinct strategies (e.g., Cell 1: Long/Short Equity, Cell 2: Distressed Debt) allowing investors to allocate to specific cells without cross-contamination risk.
- Captive Insurance: Housing different insurance risks for different corporate groups within a single regulatory vehicle.
- Platform Structuring: An investment manager sets up one SPC and launches new portfolios for bespoke client mandates, saving the cost of incorporating entirely new companies each time.
| Aspect | Standalone Company | SPC Portfolio (Cell) |
|---|---|---|
| Legal Personality | Yes | No (relies on the SPC's personality) |
| Board of Directors | Unique to company | Same board across all portfolios |
| Setup Cost | High (New entity) | Low (Marginal cost of new cell) |
Contractual Care
While the statute provides ring-fencing, it is vital that the directors explicitly contract on behalf of a specific portfolio (e.g., "SPC Ltd, for and on behalf of Portfolio X"). Failing to do so can expose the core company's general assets to liability.
Calculate Marginal SPC Costs