|
Legal Form
As in all other types of
funds, a
Professional Investor Fund maybe be set up as either:
General
Such funds target
investors in
accordance with their minimum investment threshold. The
character of the fund is
non-retail and therefore not subject to some of the usual
restrictions on their
investment or borrowing powers as normal retail funds.
Nomenclature usually used
to refer
to these type of funds includes Professional Investor Funds,
Hedge Funds, Expert
Funds & Institutional Funds. These are but a few names used
to refer to funds
that target professional investors and/or high net worth
individuals.
Maltese PIFs may be sold
solely to
investors who satisfy the minimum investment threshold:
�Experienced
Investors� are
subject to a minimum investment threshold of US$ 20,000, (or
equivalent in any
convertible currency)
�Qualifying
Investors� are
subject to a minimum threshold of US$ 100,000 (or equivalent in
any convertible
currency) and
'Extraordinary
Investors�
are subject to a minimum investment threshold of US$ 1,000,000,
(or equivalent
in any convertible currency).
In all PIFs, the Board of
Directors nad Service Providers must satisfy the MFSA 'fit &
proper' test. All
service providers may be established outside Malta provided that
they are
established and regulated in a recognised jurisdiction and a
local Judicial
Representative is appointed. Maltese PIFs may also benefit from
self-management.
Experienced
Investors
Besides the minimum
investment
threshold of US$ 20,000 (which minimum investment threshold
applies to each
single Experienced Investor) other conditions include that
requirements that
show that the Experienced Investors are persons having the
expertise and
knowledge to be in a position to make their own investment
decisions and
understand the risks involved.
An investor must state
the basis
on which he/she satisfies this definition, by confirming that
he/she is a
person:
-
having relevant
work
experience having at least worked in the financial
sector for one year in a
professional position or having been active in this type
of investment; or
-
having reasonable
experience
in the acquisition and/or disposal of funds of a similar
nature or risk
profile, or property of the same kind as the property,
or a substantial part
of the property, to which the PIF in question relates;
or
-
who has carried
out
investment transactions in significant size at a certain
frequency; or by
giving any other appropriate reason.
The Experienced Investor
PIF must
appoint a Custodian with a safekeeping and monitoring role; the
leverage
required is the same level as that of UCITS and the only
specific investment
restrictions adopted are those that are self-imposed by the
Manager.
Qualifying
Investors
Besides the minimum
investment
threshold of US$ 100,000 (which minimum investment threshold
applies to each
single Qualifying Investor) other conditions include that the
investor must
certify that he/she/it meets one or more of the following
criteria:
-
a body corporate
which has
net assets in excess of USD1.0 million or which is part
of a group which has
net assets in excess of USD1.0 million;
-
an unincorporated
bona fide
body of persons or association which has net assets in
excess of USD 1.0
million;
-
a trust where the
net value
of the trust�s assets is in excess of USD1.0 million;
-
a person having
reasonable
experience in the acquisition and/or disposal of:-
- funds of a similar nature or risk profile;
- property of the same kind as the property, or a
substantial part of the
property, to which the PIF in question relates;
-
an individual
whose net worth
or joint net worth with that person�s spouse, exceeds
USD 1.0 million;
-
employees and
directors of
service providers to the PIF;
-
relations and
close friends
of the promoters limited to a total of 10 persons per
PIF;
-
entities with (or
which form
part of a group with) USD 5.0 million or more under
discretionary management
or advice, investing on its own account or for the
account of its clients;
-
he/she/it
qualifies as a PIF
promoted to Qualifying Investors.
A Custodian / Prime
Broker need
not be appointed provided that there are adequate safekeeping
arrangements;
there are no investment or borrowing restrictions and there is
unlimited use of
leverage.
Extraordinary
Investors
Besides the minimum
investment
threshold of US$ 1,000,000 (which minimum investment threshold
applies to each
single Extraordinary Investor), a few other conditions/criteria
apply to PIFs
that target Extraordinary Investors:
-
the PIF has no
investment or
borrowing restrictions;
-
there is
unlimited use of
Leverage
-
a Custodian/Prime
Broker need
not be appointed provided that there are adequate safe
keeping arrangements
-
Prospectus is not
necessary -
a marketing document is enough
-
the Fit &
Proper test in
respect of Service Providers, Directors and Founder
Shareholders need not be
concluded pre-licensing as MFSA will be relying on the
information
declarations in the application documents and supporting
documentation
-
When one or more
service
providers are not regulated in recognised jurisdiction,
the Fit & Proper
test in respect of such Service Provider (s) must be
concluded pre-licensing
-
may be set up as
a
self-managed fund
Offering Document
A PIF must issue an
Offering
Document which is a document intended to provide sufficient
information to
enable potential investors to take an informed investment
decision. The Offering
Document must be approved by the PIF�s Board of Directors (or
its external
Manager, if appointed) and a written copy of their approval must
be provided to
the MFSA.
Listing on a
Recognised
Investment Exchange
A PIF (provided that it
is not a
private company) may apply to a Recognised Investment Exchange
for a listing. A
PIF which is established abroad, marketed exclusively abroad and
obtains a
licence from the MFSA solely for the purpose of obtaining a
listing on a
Recognised Investment Exchange, must appoint a judicial
representative in Malta.
Our
Service
For more information on how we can help you, please
Contact Us
at your
convenience.
|
