Fund Department

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Specialised Investment Fund

Primary vehicle for Alternative Investment Fund Managers in Luxembourg:

The Specialised Investment Fund (SIF) is a regulated, Luxembourg-branded, investment fund vehicle for well informed, institutional and qualified investors.

 

  • A SIF may take the legal form of a common fund (a mutual fund, FCP – fonds Commun de Placement)

  • or may be incorporated as an investment company (SICAV –Société d'Investissement à Capital Variable or SICAF – Société d'Investissement à Capital Fixe).

 

Each Specialised Investment Fund may be set up as a stand-alone fund or as an umbrella fund with multiple compartments; each with a different investment policy and an unlimited number of share classes, depending on the needs of the investors and fee structure.

The structures may be open-ended or closed-ended.
The FCP has no legal personality and must be managed by a separate management company established in Luxembourg.

 

Luxembourg Specialised Investment Fund

 

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More details about the SIF

Eligible assets for a Specialised Investment Fund

 

The principal characteristic of the Specialised Investment Fund (SIF) is the lack of any constraints on the type of assets in which it can invest and a lighter supervisory regime.

Since investments are allowable in any type of assets, the SIF is suitable for establishing anything from a traditional securities or money market fund to the creation of a real-estate fund, hedge fund or private equity fund. The SIF must have active portfolio management.

The SIF's investments can be made in any type of asset, with no exclusion in Luxembourg or abroad:

  • Bonds, shares, financial instruments, other funds, other SIF, fund of funds, structured products, ETF, derivative ( warrants, options, futures)

  • Any hedge fund strategies (CTA, Long/short, Global Macro, Systematic, Event Driven, Commodities, Emerging Market, Protection of Tail Risk, Managed Futures, Technology)

  • Real estate (commercial, private, directly or indirectly)

  • Private equity (shares, loans, funds)

  • Distressed (debt, vulture funds, securitisation)

  • Currencies, precious metals

  • Cleantech, "Green" investments or projects

  • Micro Finance

  • Also art work, cars, jewellery, watches, wine.

Capital requirement

 

If the SICAV/SICAF is incorporated as:

  • a public limited company (SA) or a partnership limited by shares (SCA), the SIF must have a minimum capital of EUR 31,000 upon incorporation

  • a private limited company (SàRL), the SIF must have a minimum capital of EUR 12,500 upon incorporation

  • a Coopsa, no minimum capital is required.


A minimum of EUR 1,250,000 net assets must be reached within a period of 12 months following its authorisation by CSSF. Only 5% of the capital needs to be paid up on subscription.

 

Authorisation and supervision

 

As a regulated vehicle, the SIF must be approved by the Luxembourg supervisory authority, CSSF.

The application can be made quite quickly in order to receive approval from the CSSF and start its incorporation.

The application file will be analysed by CSSF and the authorisation will be granted subject to:

  • approval of the constitutional documents

  • approval of the choice of depositary bank

  • approval of the directors of the fund or managers of the management company

  • risk management function description

  • approval of the choice of auditor

Service providers


Management company:
A common fund has no legal personality and must therefore be managed by a management company.
The individuals who effectively conduct the business of a management company must be of good repute and be sufficiently experienced in respect of the type of SIF to be managed. The management company must have an initial capital of at least EUR 125,000.

Depositary bank:
Luxembourg SIFs must appoint a credit institution as depositary bank which is responsible for both the safekeeping of assets and the supervision of the fund and its management company (FCP).

Central administration:
The central administration of a Specialised Investment Fund must be in Luxembourg, but certain functions may be outsourced to a third party for the purpose of a more efficient conduct of business. This concerns the accounting, NAV calculation, keeping of the register of shareholders/unit holders, handling of subscriptions and redemptions, communication with investors and preparation of financial statements.

External Auditor:
The fund (SICAV) or its management company (FCP) prepares an annual report which is to be audited by an authorised external auditor with appropriate professional experience. There is no obligation to produce a semi-annual report

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