Reserved Alternative Investment Funds: Luxembourg about to innovate again
The Luxembourg government approved on December 4, 2015 the bill of law creating the “reserved alternative investment funds (RAIF)”, adding thereby a new powerful tool to the already rich offer of funds regimes Luxembourg offers to Fund managers and investors.
The RAIF shall mirror the current and successful regimes of the Specialised Investment Funds (SIF) and Investment Companies in Risk Capital (SICAR), except that the RAIF shall not be subject to the prior authorisation and supervision by the Commission de Surveillance du Secteur Financier (CSSF).
This doesn’t mean however that RAIFs shall not be subject to any regulation or supervision as the new regime provides that RAIFs must be managed by an alternative investment fund managers duly authorised under the AIFMD regime, and must thus comply with the investor protective regime created by that Directive.
The RAIFs shall benefit of the European passport granted by the AIFM Directive for marketing to professional investors in the EU The timeframe to set-up a RAIF shall then be reduced to a few days instead of a few months, substantially increasing the attractiveness of these already flexible and well established fund vehicles.
Beside this, the RAIFs will benefit from the same features of regular SIF-AIFs or SICARs-AIF: same legal forms (corporate or contractual), qualifying eligible investors, tax regime, broad range of eligible assets, limited (or absence, in the case of SICARs) of risk spreading requirements, umbrella form, identical tax regime and flexible subscription, redemption and distribution modalities.
The Bill of Law is expected to obtain Parliament approval in the course of the spring in 2016.