The New Luxembourg Reserved Alternative Investment Fund
On July 14th 2016 the Luxembourg Parliament voted and approved the Law concerning the implementation of the new investment fund regime, known as the “Reserved Alternative Investment Fund (RAIF)”.
This is another step towards increasing the attractiveness and leadership of the Luxembourg investment fund and asset management industry (first in Europe for investment funds, and second worldwide behind the U.S.) and represents a welcome enhancement of the Luxembourg AIF environment.
A RAIF is a Luxembourg alternative investment fund (AIF) managed and supervised by an external authorized Alternative Investment Fund Manager (AIFM) and subject to AIFMD requirements. A RAIF is not directly subject to the approval and (product) supervision of the local Supervisory Authority (CSSF) but only to indirect supervision through its Fund Manager (one layer solution).
The key advantages of the RAIF are therefore:
- A very attractive and quick time to market
- Very flexible risk diversification rules
- The possibility to create umbrella vehicles / Fund of Funds
- The possibility to create contractual vehicles like the FCPs
- Fund taxation (not corporate tax) is applicable (except in case of risk capital)
- No restrictions on distributions, no legal reserve required
- Schemes with variable capital are available
- Only indirect supervision by AIFM, directors, depository and auditors
The RAIF is expected to complete the toolkit of Investment Fund Products available in Luxembourg and is the perfect solution for asset managers, family offices, financial institutions and UHNWIs as it combines the advantages and attractiveness offered by regulated vehicles with the flexibility and quick time to market provided by unregulated instruments.
The Fund Services Division of Amicorp Luxembourg SA provides central administration, domiciliation and transfer agent services for all sorts of Luxembourg investment fund vehicles and regulated entities and is able to offer, together with its local partners, turnkey solutions from scratch.
Should you need more information about the new RAIF or our other solutions please do not hesitate to contact us.