Sponsors weighing an offshore feeder for non-US LP capital
Cayman SPVs and offshore feeders
The standard offshore feeder for non-US LP capital — and how to decide whether you need one.
The problem
Sponsors raising materially from non-US institutions are often told they need a Cayman vehicle, without a clear account of what it buys them. The trade-off is real but narrow: a Cayman feeder is tax-neutral and familiar to international allocators, but it costs more than Delaware, usually needs a US master vehicle alongside it, and adds a layer of structure that a single-asset deal may not justify.
How Rocketbook handles it
Rocketbook supports Delaware today, and Cayman is on the roadmap. For most raises the better move is to launch in Delaware now and structure an offshore feeder only once non-US institutional capital is large enough to warrant the extra cost and complexity. If a Cayman feeder is essential to your raise, talk to us before you commit to a structure and we will help you plan it.
Workflow
- 1
Size the non-US allocation
Work out how much of the round is coming from non-US LPs who genuinely require a non-US vehicle, rather than who would merely prefer one.
- 2
Test the Delaware path first
Many non-US investors invest into Delaware SPVs without difficulty, once withholding and W-8 documentation are explained upfront. This is the cheapest answer when it works.
- 3
Model the master-feeder cost
A Cayman feeder is usually paired with a US master, so budget for two vehicles, two sets of administration, and the professional fees to structure them.
- 4
Launch Delaware, plan offshore
Run the current deal in Delaware while planning the offshore structure for the raise where it genuinely pays for itself.
What you get
- Cayman is on the Rocketbook roadmap — Delaware is what you can launch today
- Tax-neutral and well established for investment funds
- Broadly accepted by international institutional investors
- No K-1 reporting burden for non-US LPs
- Higher formation and ongoing cost than Delaware, and usually needs a US master vehicle
Frequently asked questions
Can I form a Cayman SPV on Rocketbook today?
Not yet. Delaware is live today; Cayman, Luxembourg, and the UK are on the roadmap. If an offshore vehicle is essential for your raise, get in touch and we will help you plan the structure, running the Delaware side in the meantime.
Do my non-US LPs actually need a Cayman vehicle?
Often not. Many non-US investors participate in Delaware SPVs without difficulty once the withholding position and W-8 documentation are explained in advance. A Cayman feeder earns its cost when non-US institutional capital is material, when LPs are mandated to avoid US vehicles, or when K-1 reporting is genuinely unacceptable to them.
Why is Cayman usually paired with a US master vehicle?
The feeder pools non-US capital into a master vehicle that makes the actual investment, which keeps one line on the company's cap table while separating the tax treatment of the two investor pools. It is effective and it means two vehicles to form and administer instead of one.
Related glossary terms
Ready to talk through your SPV?
Book a demo and we'll walk you through how Rocketbook fits your deal flow.