Professional Investment Funds

PIFs are promoted to Qualifying Investors subject to (which rules also apply to AIFs and Notified AIFs promoted to Qualifying Investors):

a minimum investment threshold of EUR 100,000; and
declares in writing to the manager and the PIF, AIF or Notified AIF that it is aware of an accepts the risks associated with the proposed investment; and
meets one or more of the following criteria:
- a body corporate which has net assets in excess of EUR 750,000 or which is part of a group which has net assets in excess of EUR 750,000 (or in each case the equivalent in any other currency);
- an unincorporated body of persons or association which has net assets in excess of EUR 750,000 (or the equivalent in any other currency);
- a trust where the net value of the trust’s assets is in excess of EUR 750,000 (or the equivalent in any other currency);
- an individual whose net worth or joint net worth with that person’s spouse or civil partner, exceeds EUR 750,000 (or the equivalent in any other currency);
- a senior employee or Director of Service Providers to the PIF, AIF or Notified AIF.

In the case of an umbrella fund comprising several sub-funds, the relevant investment threshold would apply on a “per scheme” basis rather than on a “per sub-fund basis” such that an investor may spread the investment requirement across various sub-funds.

Investment Objectives

As noted above, funds must have a spreading or diversification of investments. An investment portfolio must accordingly be sufficiently varied and should hold near-cash investments for the dual purposes and benefit of diversifying the Fund portfolio whilst addressing liquidity concerns which may arise when investors liquidate their holdings in accordance with the Fund’s Offering Document.

As regards currency denomination, each Fund must be denominated in one base currency for financial reporting purposes. However, each sub-fund in an umbrella structure may have a different base currency.

Composition of a Fund’s Board of Directors

The Board of Directors of an AIF, Notified AIF and PIF must be composed of three or more Directors being independent from the Manager or the management function (in the case of a self-managed Fund), the Administrator and the Custodian, and having experience in the financial services industry.

Management of A Fund

A UCITS, AIF and PIF may be self-managed or managed by an external fund manager, while a Notified AIF must always be managed by an AIFM as previously discussed.

Should an external manager not be appointed in respect of a given fund, responsibility for the portfolio and risk management of the Fund’s assets would be vested in its Board of Directors.

The Board of Directors of a self-managed Fund would typically appoint an Investment Committee – which must be composed of at least three persons who satisfy “fit and proper” tests and an additional competence assessment by the MFSA.

PIFs are promoted to Qualifying Investors subject to (which rules also apply to AIFs and Notified AIFs promoted to Qualifying Investors):

a minimum investment threshold of EUR 100,000; and
declares in writing to the manager and the PIF, AIF or Notified AIF that it is aware of an accepts the risks associated with the proposed investment; and
meets one or more of the following criteria:
- a body corporate which has net assets in excess of EUR 750,000 or which is part of a group which has net assets in excess of EUR 750,000 (or in each case the equivalent in any other currency);
- an unincorporated body of persons or association which has net assets in excess of EUR 750,000 (or the equivalent in any other currency);
- a trust where the net value of the trust’s assets is in excess of EUR 750,000 (or the equivalent in any other currency);
- an individual whose net worth or joint net worth with that person’s spouse or civil partner, exceeds EUR 750,000 (or the equivalent in any other currency);
- a senior employee or Director of Service Providers to the PIF, AIF or Notified AIF.

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