For almost 25 years, Ireland has been one of the world's leading alternative investment fund domiciles, with its original qualifying investor fund ("QIF") product internationally recognised as a very flexible alternative fund offering which could be launched quickly and within a regulated framework.
In conjunction with the introduction of the EU Directive 2011/61/EU on Alternative Investment Fund Managers ("AIFMD" or the "Directive"), the QIF has been replaced by what is considered an even better regulated product known as the qualifying investor alternative investment fund ("QIAIF"). Not only is the QIAIF suitable for hedge funds, FoHFs, less liquid and illiquid alternatives, private equity, venture capital, development capital and real estate funds (as well as most other types of investment fund exposure, whether considered "alternative" or not), it can also be marketed freely to professional investors throughout the 28 EU Member States (and the 3 additional European Economic Area Members States) by an authorised AIFM using AIFMD's marketing passport.
Latest available statistics at May 2015 indicate that there are now 1,920 QIAIFs (including sub-funds) representing in excess of Euro 355 billion in net assets.
QIAIFs benefit from the following features and Irish domicile infrastructure:
- a QIAIF with an authorised AIFM has access to European professional investors in 28 EU Member States (and the 3 additional European Economic Area Members States) using the AIFMD marketing passport;
- Euro 100,000 minimum subscription requirement (Euro 500,000 for QIAIFs seeking to disapply certain rules in respect of investment in underlying collective investment schemes);
- QIAIFs are available in 5 different legal structures;
- QIAIFs are not subject to Irish tax on income or gains and no Irish withholding taxes on redemption payments or dividends, provided certain straightforward conditions are adhered to;
- very few investment restrictions, the principal ones being those imposed by AIFMD on certain private equity type strategies and on investments in securitisations and certain Central Bank of Ireland imposed restrictions;
- no borrowing or leverage restrictions (other than for loan origination funds);
- fast-track, 24 hour regulatory approval process;
- internally(self)-managed, own AIFM, external AIFM and platform models all available;
- listing readily available on the Irish Stock Exchange, if desired;
- significant service provider infrastructure in Ireland, with 47 fund administrators and 18 depositories);
- capacity to migrate offshore funds from a number of domiciles to Ireland as QIAIFs, via a reasonably efficient process, avoiding any asset realisation;
- and many more.
At Dillon Eustace, assisting asset managers, fund sponsors, platform providers, investors and fund service providers (administrators, depositaries, prime brokers and others) with the structuring, formation and cross-border distribution of QIAIF (and prior QIF type) alternative funds has been a core part of our practice since the early 1990s. Our 40 lawyer (15 partner) Investment Funds legal team includes Irish, US, UK and Cayman qualified lawyers advising on product design, formation, authorisation and launch, prospectus and contractual documentation negotiation, interaction with regulators and exchanges.
We also offer funds listing and tax expertise, as well as follow-on regulatory and compliance advices, bringing to bear in-depth knowledge with a "can do" attitude. We are regular advisers to first-of-kind transactions and our team is recognised internationally as one of the most innovative and dynamic groups of lawyers in this practice area. The team has consistently been ranked as top tier by IFLR1000, The Legal 500, Chambers Global and Chambers Europe.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.