Virtualization has rapidly gained popularity affecting multiple levels of computing stack. Since it decouples resources from their users it provides greater flexibility in terms of resource allocation but also brings new challenges for optimal design, provisioning and runtime management of systems. Cloud computing is a paradigm of computing that offers virtualized resources "as a service." Cloud Managers are responsible for lifecycle management of virtual resources, efficient utilization of physical resources and exposing basic operational APIs to users. Software solutions can then be deployed on these virtual resources. In this paper we propose a Virtual Hypervisor abstraction allowing solution managers to have an improved control over the resource allocation decisions regarding their virtual machines while maintaining cloud manager's role as the ultimate physical resource manager. We also introduce a novel resource allocation algorithm illustrating how the Virtual Hypervisor abstraction can be efficiently realized by the global cloud manager. We also use simulations to illustrate that our algorithm can be used to achieve fairer resource sharing and isolation across different Virtual Hypervisors. ©2010 IEEE.