“Reserved Alternative Investment Funds" (RAIF) - Overview

Published 13 March 2018 by HALSEY GROUP S.àr.l.

RAIF:

The “reserved alternative investment funds (RAIF)”, governed by the very recent law of July 23,
2016, add a new powerful tool to the already rich offer of funds regimes Luxembourg offers to
Fund managers and investors.

This new regime allows fund promoters and alternative investment fund managers to set up a new
category of AIF mirroring the already successful tax and legal regimes of the Specialised Investment
Funds (SIF) and Investment Companies in Risk Capital (SICAR), except that the RAIF shall not
be subject to the prior authorisation and direct supervision by the Commission de Surveillance du
Secteur Financier (CSSF).
General features

The RAIF optional regime applies to Luxembourg AIFs (managed by an authorised AIFM) which
invest in accordance with the risk-spreading principle (except for RAIFs investing exclusively in risk
capital) whose securities or partnership interests are reserved to well-informed investors (please
refer to the developments relating to SIFs here below) and whose constitutive documents provide
that they are subject to the provisions of the RAIF law.
RAIFs may adopt the contractual form of a common investment fund (FCP), without legal personality,
a special limited partnership (S.C.Sp.), a partnership form without legal personality), or a limited
partnership (S.C.S.), or a partnership limited by shares (S.C.A.), a cooperative in the form of a public
limited company (S.COOP.S.A.), a limited company (S.à r.l.) or public limited company (S.A.) governed
by Luxembourg law.

The RAIF Law expressly allows the creation of undertakings with multiple compartments (umbrella
structures) so as to allow the grouping of different investment strategies or to meet the demands
of different investors, within one single legal structure.
The RAIFs may opt for a variable capital structure. The risk spreading requirements are those applicable
to SIFs except if the RAIF elects to invest in qualifying risk capital investments only (like for
SICARs).

The minimum capitalisation of a RAIF is EUR 1,250,000 that must be reached within 12 months
following the date of creation of the RAIF. In case of corporate RAIF, the reference point for this
minimum amount is the sum of the subscribed share capital plus any share premiums or the value
of the amount constituting partnership interests.
A sub-fund of an umbrella RAIF can invest in one or more other compartments of the same RAIF
(cross-compartment investment).

At least 5% of each share (except for SCS and SCSp, for which there is no such minimum) must be
paid up at subscription. A SIF may opt for a variable or fixed share capital, and may be structured as
an open- ended or closed- end fund.

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