The AIF

An Alternative Investment Fund (AIF) is a collective investment undertakings, which raises funds from several investors. They raise funds with a view to invest (therefore, investment funds) with a strictly stipulated investment policy. An AIF requires authorisation by the regulator, CySEC, in the case of Cyprus, before the commencement of its fund raising and investing.

An AIF can take any of the forms below:

• variable capital investment company (VCIC)
• fixed capital investment company,
• limited partnership,
• common fund.

The RAIF

A Registered Alternative Investment Fund (RAIF) is slightly yet significantly different from an AIF. In summary, a RAIF:

• may be structured as
  • a common fund,
  • an investment company with variable,
  • a fixed capital investment company,
  • as a limited partnership.
• does not need to be authorised by the Cyprus Security and Exchange Commission (CySEC). This means a RAIF, will not be directly regulated by CySEC and will instead be under the supervision of the appointed external AIMF.
• has no minimum capital requirements.
• may be open-ended or closed-ended.
• can be an umbrella fund, allowing the setup of multiple investment sub-funds,
• there are no investment restrictions, with the exception that RAIFs cannot be a
  • Funds of Funds,
  • Money Market Funds or
  • Loan Origination Funds.
• may have an unlimited number of investors,
• there is no limitation for the assets under management.

The RAIF in Cyprus has eliminated the lengthy authorisation and licencing procedures and the licencing costs has been reduced substantially.

The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.