On 14th July 2016 the updated version of the draft law relating to Reserved Alternative Investment Funds (“RAIFs”) has been voted by the Luxembourg Parliament.
RAIFs are unregulated alternative investment funds which will enjoy all of the flexibilities offered to specialised investment funds (“SIF”) and investment companies in risk capital (“SICAR”) without being subject to the prior authorisation, supervision and regulation of the Luxembourg supervisory authority (“CSSF”).
RAIFs will be subject to the requirements provided under Directive 2011/61/EU (“AIFMD Directive”) and shall be managed by an external authorised Alternative Investment Fund Manager (“AIFM”) established in Luxembourg, in another EU Member State or in a third country once the AIFMD passport will be available for those countries. It will be compulsory for RAIFs to have an AIFM at all times. An indirect supervision of the RAIF will thus be ensured by the competent supervisory authority of its AIFM.
RAIFs shall have Luxembourg based central administrative agent and depositary bank. The accounting information given in the annual report of RAIFs must be audited by an external auditor, also based in Luxembourg.
RAIFs may be established as investment companies with variable share capital or with fixed share capital or as mutual funds (fonds commun de placement) and may be closed-ended or open-ended. RAIFs may be also constituted with multiple compartments. RAIFS may be free to adopt any kind of investment strategy and may invest in all kinds of assets without being subject to any borrowing restrictions. Cross investments between compartments of the same RAIF will also be allowed.
The AIFM of a RAIF shall be able to market the RAIF to professional investors in Member States by using the AIFMD passport.
RAIFs shall be submitted to the same favourable tax treatment as the one applicable to SIFs or SICARs.