Alternative Investment Funds
AIFs

These are Collective Investment Schemes, including their sub-funds, which raises capital from a number of investors, with a view of investing it in accordance with a defined investment policy for the benefit of those investors, and which does not qualify as an Undertaking for Collective Investment in Transferable Securities (UCITS) in terms of the UCITS Directive.  Thus, hedge funds, private equity funds, real estate fund and venture capital funds fall within AIFMD.

AIFMD is applicable to:​

 

  • Fund manager established in or outside the EU, managing and/or marketing their AIFs in the EU;

  • Fund managers established in the EU, managing and / or marketing AIFs;

  • Collective Investment Schemes (other than UCITS), marketed in the EU or managed by an EU/EEA manager of alternative investment funds.

AIFs are required to appoint​:

 

  • Custodian / Depositary having substance in Malta and authorised by the MFSA;

  • AIFM when AIF is third party managed (when AIF is self-managed, it needs to have an Investment Committee);

  • Compliance Office;

  • MLRO;

  • External Valuer appointed by AIFM (when self-managed, by the AIF).

AIFs main benefit is that once approved by an EU regulator, they can trade across the whole EU.

Notified AIFs

 

The process of notification should apply to AIFs which are promoted to Qualifying Investors.  Funds falling within the scope of the notification process shall be managed by a Full-Scope AIFM.  The below list lays down the main features and advantages of such regime:

 

  • NAIF is not subject to the licensing process by the MFSA but are only Notified to the MFSA;

  • Onus of due-diligence and ongoing supervision lies within the AIFM;

  • NAIF can be both open-ended and close-ended;

  • NAIF cannot be self-managed;

  • NAIF cannot be in the form of a loan fund or invest in non-financial assets;

  • AIFM is to appoint a MLRO as an oversight over the NAIF.

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