A RAIF (Reserved Alternative Investment Fund) is a reserved alternative investment fund, established in Luxembourg in 2016, which does not require direct approval from the financial supervisory authority (CSSF) at the time of its creation. This flexibility allows for faster time-to-market and targets qualified and professional investors. Although it is not directly supervised by the CSSF, it is still subject to indirect supervision through its manager, the AIFM (Alternative Investment Fund Manager), who must be authorized.
Key Characteristics
Supervision: It is not subject to direct prudential supervision by the CSSF; supervision occurs indirectly through the AIFM, which may be based in Luxembourg or another EU country.
Investors: Targeted at professional, institutional, or qualified investors who meet specific investment and expertise requirements.
Flexibility: Has no specific restrictions on investment strategies, although risk diversification is required, making it ideal for alternative investments such as private equity, real estate, venture capital, and private debt.
Structure: Can be constituted as a company (SICAV/SICAF), contractual fund, or partnership, and can include multiple compartments (sub-funds).
Tax Advantages: It is subject to an annual tax of $0.01\%$ on net assets but is, in principle, exempt from income and wealth taxes (with the exception of some local and municipal taxes) and from taxes on distributions or capital gains.