Professional Investor Funds
Governed by the Investment Services Rules in Malta, PIFs are mostly common for the setting up of Hedge Funds as well as for a number of different fund strategies involved into Private Equity, Real Estate and Venture Capital.
Advantages of PIFs
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Flexibility – PIFs have minimal investment restrictions;
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Costs - low;
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Borrowing – up to 100% of NAV;
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Self-managed – PIFs can opt to be self-managed by an Investment Committee;
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Choice to appoint service providers – Custodian, manager or administrator are not mandatory.
Qualifying Investors' requirements
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Invest a minimum of Eur100k or equivalent, which investment may not be reduced below such a minimum at any time by way of partial redemption;
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Declare in writing that they are aware of and accept the risks associated with the proposed investment;
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Satisfy, at least, one of the following:
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A body corporate which has net assets in excess of Eur750k or which is part of a group which has net assets in excess of Eur750k or, in each case, the currency equivalent thereof;
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An unincorporated body of persons or association which has net assets in excess of Eur750k or the currency equivalent;
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A Trust where the net value of the Trust’s assets is in excess of Eur750k or the currency equivalent;
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An individual whose net worth or joint net worth with that of a person’s spouse, exceeds Eur750k or the currency equivalent;
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A senior employee or a director of a service provider to the fund.
PIFs are subject to private placements only and do not benefit from the passport rights within the EU/EEA as carried by the AIFs and UCITS.
Alternative Investment Fund Managers Directive ("AIFMD")
Fund managers and promoters may opt for a De Minimis hedge fund licence which is less onerous than the AIFMD. For a self-managed hedge fund having its day-to-day portfolio management engaged within an investment committee as appointed by the Directors of the Fund, the AIF must have an AUM of less that Eur100 million – including assets held on leverage, or else have an unleveraged AUM of not more than Eur500 milion and a redemption gate to investors of not less than 5 years.
In applying the above criteria, the notional value of the assets must be considered.