The RAIF: What can We Expect?
The RAIF offers an attractive solution for the implementation of all types of alternative investment strategies for the benefit of well-informed investors, specifically institutional investors and professional investors
In practical terms, the RAIF can invest in any asset class: private equity, real estate, hedge funds, infrastructure, debt acquisition and loan origination, as well as listed securities of any type.
No direct supervision
In addition to this broad scope of application, the RAIF provides an effective solution to time-to-market issues. Indeed, the absence of CSSF prior authorization as well as a flexible legal framework for structure incorporation are the attractive features of the new regime.
In this context, the absence of direct supervision by the CSSF is offset by indirect supervision, notably through the supervision of the AIFM, depositary or auditor, in order to ensure the protection of investors.
Based on both the SICAR regime and the SIF regime, the RAIF law combines both regimes into a single legal text. Thus, such as for the SIF and the SICAR, all forms of Luxembourg company, partnership and contractual arrangement are eligible for setting up a RAIF.
A RAIF may also adopt a variable (e.g., SICAV) or fixed capital (e.g., SICAF) structure. Furthermore, the RAIF may be organized as an umbrella structure, which means that each sub-fund may have a specific investment policy, its own investors, cost structures and distribution policy.
True alternative to regulated and unregulated funds
What are the advantages of the RAIF?
Survey of 120 professionals from the Luxembourg financial marketplace in November 2016.
Luxembourg offers a truly global reach combined with an environment characterized by an ability to connect managers and investors, stability and predictability, as well as a solid and flexible, legal, regulatory and fiscal framework.
The new RAIF regime reflects Luxembourg’s desire to improve the supervision of alternative investment. Initially, the adoption of the AIF directive led to a dual supervision regime (at the asset manager level on the one hand, and at the AIF level on the other hand).
Luxembourg RAIFs are positioning themselves to be true alternatives to both regulated and unregulated funds. Full compatibility with EU regulations, truly global marketing reach and swift time-to-market are all contributing to make Luxembourg an essential marketplace.