Reserved Alternative Investment Fund
The investment will be structured as a Luxemburg fund and will take on the form of a RAIF (Reserved Alternative Investment Fund). We will have Lemanik as AIFM (Alternative Investment Fund Manager), INMOTHINK as Investment Advisor, a top-rated Luxemburg based bank as custodian, domiciliating administrator and transfer agent, RSM as auditors, Mazars as valuers and Simmons & Simmons as lawyers and legal counsel.
All these service providers are top purveyors in their respective areas of expertise, providing therefore all the security expected for the investors..
The Law on Reserved Alternative Investment Funds dated 23 July 2016 (“RAIF Law”), introducing a new type of Luxembourg investment vehicle named “Reserved Alternative Investment Fund” (in short “RAIF”), entered into force on 1 August 2016.
The RAIF is regulated under the AIFMD and benefits from the corresponding EU passport but is not supervised by the Commission de Surveillance du Secteur Financier (“CSSF”), making it an attractive vehicle from a time-to-market perspective.
1 – The AIFMD, a managers’ directive and a change of paradigm
The AIFMD requires that authorised alternative investment fund managers (“AIFMs”) ensure that the alternative investment funds (“AIFs”) they manage comply with the AIFMD product rules, irrespective of whether or not the relevant AIF is subject to a product regulation.
When an AIF is a regulated and supervised product, compliance with product rules is consequently ensured at two levels: at the level of the AIF itself and at the level of its AIFM. Similarly, the AIF is subject to a double supervision system, by its supervisory authority and that of its AIFM, which could be based in a different country.
This double system of approval and supervision is not required by the AIFMD. It entails increased protection, which is not necessarily deemed justified by a series of professional and sophisticated investors performing their own review of the AIF’s structure and documentation.
2 – The RAIF
The introduction of the RAIF regime seeks to widen the range of investment vehicles available in Luxembourg, offering a new option to the initiators of Luxembourg AIF projects.
The creation, launch, documentation, activities and termination of the RAIF are not subject to the approval of or any supervision by the CSSF, but still enjoy all the structuring flexibility from which (CSSF approved and supervised) Luxembourg funds benefit.
In our case, INMONCIN FUND is the name of the RAIF.
In order to be eligible for this new regime, the RAIF has to be an AIF managed by an authorised AIFM, both within the meaning of the AIFMD. The AIFM may be established in Luxembourg, in another Member State of the European Union (“EU Member State”) or even, once the AIFMD passport is available to third countries, in a third country in accordance with the provisions of the AIFMD.
Due to the necessity for the RAIF to be managed by an authorised AIFM, it is indirectly supervised through the prudential supervision exercised by the competent authority of its AIFM. For the same reason, the RAIF benefits from the European passport granted by the AIFMD for marketing to professional investors in the EU.