FAI assists with the submission of applications to CySEC in order to obtain an AIF, AIFM, AIFLNP, RAIF license & ongoing services including:
Advising on the set up and structuring
Assisting with preparing the application to CySEC
Private Offering Memorandum
Ongoing compliance services throughout the life of the Fund
Alternative Investment Fund (AIF)
An AIF available to the public can be established in three different forms:
- a Company (with fixed or variable capital),
- a Common Fund,
- a Limited Liability Partnership.
All three legal forms allow for legally segregated sub-funds to be created and there are no limits to the number of investors
An AIF has the following characteristics:
- Can have Retail clients
- Able to market freely via Passport application
- Can be internally or externally managed
- A Depository may or may not be required
- Subject to minimum capital requirements of Eur125,000 in case of self-managed and Eur300,000 if managed by an AIFM
- No limits on number of investors
- No restrictions regarding types of Investments
- Subject to certain investment restrictions for risk spreading and liquidity purposes
Alternative Investment Fund Managers (AIFMs)
Hedge funds and private equity funds and their Investment Managers (AIFMs) have not been subject to the same rules to protect the investing public as mutual (including UCITS) and pension funds and their managers. In general, the lack of financial regulation is seen by some to have contributed to the severity of the global financial crisis. The AIFM Directives and Laws are aimed at redressing this perceived regulatory gap with Supervising Authorities.
From 2015 on the AIFM Law shall also apply to non-EU AIFMs having designated Cyprus as their “member state of reference” for their management and/or marketing activities in the EU.
The AIFM Law shall apply in particular to the following activities:
- A Cyprus AIFM managing Cyprus AIFs or AIFs of another Member State or third country;
- An EU or third country AIFM managing Cyprus AIFs;
- A Cyprus AIFM marketing units or shares of AIFs they manage in other Member States or third countries;
- An EU or third country AIFM marketing units or shares of AIFs they manage in Cyprus.
Alternative Investment Fund with Limited Number of Persons (AIFLNP)
An AIFLNP has the following characteristics:
- up to 75 investors, who are professional and well informed
- Can be Internally or Externally Managed
- Assets under management should not exceed Eur100Million with Leverage and Eur500Million without leverage
- No minimum initial capital requirements
- No Investment restrictions
- No investment diversification rules
Registered Alternative Investment Fund (RAIF)
- RAIFs are not subject to ongoing monitoring by CySEC.
- They must be externally managed by an AIFM established and licensed in Cyprus or in any other EU / EEA member state.
- It is for the AIFM to ensure the general supervision and compliance in accordance with its own regulatory regime.
- RAIFs established as limited partnerships may appoint as managers UCITS management companies or a Cyprus investment firms (CIFs) authorised under MIFID II, instead of AIFMs. In these situations the RAIF would need to be close-ended and invest a minimum of 70 per cent of its funds in illiquid assets.
- Professional and well informed investors only. (minimum deposit Eur125K)
- Certain limits on marketing
- Can be listed on an Exchange