Luxembourg approves the RAIF

15th July 2016 100 - Regulatory Updates

On Thursday 14th July 2016, the Reserved Alternative Investment Fund (RAIF) law was voted in by the Luxembourg Parliament.

The RAIF fund structure will, in the most part, replicate the features of the structure of a Specialised Investment Fund with the exception that it will not require authorisation by the Commission de Surveillance du Secteur Financier, therefore making it unregulated.

The benefits of a RAIF are substantial as it will reduce the time to market for new fund launches and, whilst certain unregulated fund structures already exist in Luxembourg, this is the first that can act as an umbrella fund. The distribution of RAIFs is limited to professional / institutional investors and the minimum investment size will be €125k.

Another additional benefit is that the RAIF will be tax transparent and therefore suitable for distribution to US investors, in a similar way to the Irish ICAV with the exception that the ICAV is regulated whilst the RAIF is not.

Whilst the exact date of the law coming into force has yet to be confirmed, it is widely expected that this will occur before the end of July 2016.

For further information, please contact Daniel Maycock.