Luxembourg Alternative Investment Funds (AIF)
AIF refers broadly to all funds outside the Undertaking for Collective Investment in Transferable Securities (UCITS) regime. This includes investment funds exposed to traditional mainstream strategies and, in some cases, funds available to retail investors.
Once approved in one EU Member State, an AIF can be distributed in all other EU Member States using the EU Product Passport (exactly like UCITS), as the AIFMD aims to replicate the UCITS success story for alternative investment fund.
Luxembourg Law of 13 February 2007 under Commission de Surveillance du Secteur Financier (CSSF), regulates the funds
AIFs: target investors
“Well-informed investors”, i.e.:
- Institutional investors (e.g. banks, insurance companies, pension funds, etc.)
- Professional investors (e.g. high-net-worth individuals)
Any other investor who:
- confirms in writing that they fulfil the status of “well-informed investor”;
- invests at least €125,000; OR
- provides a bank confirmation (or similar).
|Entity Requirements||The entity making the application is Luxembourg:|
|Director’s Requirements||The licensee will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction.|
|Shareholder requirements||The applicant will need at least one shareholder.|
|Fund Administrator||The Applicant must employ a Luxembourg licensed fund administrator or an approved Foreign Administrator|
|Minimum Capital Requirements|
€1,250,000 to be reached within a period of 12 months following receipt of authorisation from the CSSF.
- If mentioned in the documentation, the AIFM must publish the net asset value (or make it available to investors). Any other publication must be made in compliance with the offering document.
- Luxembourg AIFMs are subject to transparency requirements towards investors and the CSSF, pursuant to the AIFM Law (e.g. information on conflicts of interest, liquidity risk, leverage, and remuneration policy).
- AIFs must communicate their annual reports to the CSSF and are subject to reporting requirements. AIFMs are subject to requirements towards the CSSF, notably on principal instruments, markets, exposures and concentrations in which they trade on behalf of the AIFs managed, details on the assets of the AIFs, including risk profiles, liquidity arrangements, overall level of leverage per AIF and acquisition by AIF of important holdings in non-listed companies.
About Valsen Fiduciaries
Valsen Fiduciaries is a licensed independent global service provider of a broad range of fiduciary, administrative, legal, corporate secretarial and support services.
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The Valsen Advantage
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