The RAIF - a SIF'S DNA without the burden of regulatory
The RAIF is intended to be a flexible and efficient structure.
Its regime is substantially based on the one applicable to the
specialised investment fund (SIF). The RAIF will thus be subject to
the well-informed investor and risk diversification requirements
and will offer all the features of a SIF, including, amongst
The possibility to provide for ring-fenced sub-funds
Multiple share classes
Flexibility of distributions to investors
The possibility to provide for redemption rights for
As there are no limitations in terms of eligible assets, the
RAIF may be used for all types of investment policies and
strategies. In addition, it can be set up in the form of a
corporate structure or contractual structure. Where a corporate
structure is opted for, a large choice of corporate forms is
available (such as the various Luxembourg partnership types).
The RAIF is particularly attractive as it capitalizes on the
SIF's DNA but its creation, launch and amendments are not
subject to the approval of the Luxembourg Financial Regulator (the
Commission de Surveillance du Secteur Financier, CSSF).
This feature will enable it to optimize the time to market, in an
industry where time is often of the essence.
Tax wise, the RAIF will be subject to a subscription tax of
0.01% of the net asset value. Under certain circumstances the
subscription tax may be nil.
Requirement to be managed by an authorised AIFM
The RAIF's absence of regulatory approval and supervision,
which could potentially be perceived by investors as a lack of
protection, is counterbalanced by the fact that it must be managed
by an authorised Alternative Investment Fund Manager (AIFM) based
either in Luxembourg or another EU Member State. This requirement
ensures the RAIF's indirect supervision through the regulator
of the AIFM's home Member State as well as its compliance with
the requirements of the Alternative Investment Funds Managers
Directive (AIFMD), such as the appointment of a depositary,
investor information, etc...
Last but not least, this requirement allows the RAIF to benefit
from the AIFM passport for marketing to professional investors
throughout the European Union.
RAIFs investing exclusively in risk capital
An additional measure of flexibility is provided by the fact
that RAIFs may restrict, in their constitutive documents, their
investments solely to risk capital. In this case, they shall (i) be
exempt from the risk diversification requirement and (ii) become
subject to the same tax regime as the one applicable to the
Investment Company in Risk Capital (SICAR).
The concept of "risk capital" should be interpreted in
a similar manner as in the context of the SICAR.
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