The RAIF: For Investments Of Any Colour

On 14 July 2016 Luxembourg added the eagerly awaited Reserved Alternative Investment Fund (RAIF) to its alternative investment fund structuring toolbox.

The new RAIF is very familiar as it borrows interesting features from both the SIF and the SICAR regimes. The investments must respect the same risk-spreading rules as the SIF (a maximum 30% in any asset) except if the RAIF invests solely in Risk Capital in which case the RAIF can invest up to 100% in one asset. However, unlike the SIF and the SICAR, the RAIF is not subject to any approval or ongoing supervision by the CSSF. Investor protection is built on the premise that only authorised AIFMs will be allowed to establish and manage the RAIF giving investors a high level of protection and transparency through the rules that the AIFM has to respect. We expect the RAIF to be particularly appealing to sophisticated investors who are looking for a robust structure to quickly seize investment opportunities and who are comfortable with the regulation of the Manager without direct regulation and supervision of the Fund.

Which side are you on? #RAIF is pronounced...

(more technical information here: https://t.co/kqWqM5hvas)

— KPMG Luxembourg (@KPMGLuxembourg) July 20, 2016

The RAIF's most interesting characteristics are as follows:

Structuring flexibility: the RAIF can be set up as a partnership, an investment company, or a contractual fund, either as a...