How to set up a Reserved Alternative Investment Fund (RAIF)

The Reserved Alternative Investment Funds (RAIF) grants fund managers an additional opportunity to set up a new form of Alternative Investment Fund (AIF). While RAIF combines the features and structuring flexibilities of existing regulated vehicles in Luxembourg, it is not subject to CSSF supervision. We put together practical information to set up a RAIF.

Check your eligibility

Here are the prerequisites to be eligible :

1. Investor profile – you must be a professional, institutional or well-informed investor.
2. Governance – you must appoint a fully-authorised AIFM, whether established in Luxembourg, in another EU member state or a third-country authorised AIFM (subject to implementation of the third-country AIFM management passport).
3. Service providers – you must appoint :

• a Luxembourg-based depository bank or a professional of the financial services sector providing depository services
• a central administration
• an external auditor

Collect the documents

Here’s a list of documents you need to collect:

1. Draft
   • Offering memorandum of the Fund
   • Limited Partnership Agreement
   • Agreements with service providers
   • Operating Memorandum
   • Agreements with the service providers of the General Partnership (GP)
   • Agreements with the service providers of the portfolio manager
   • First Circular Resolution of the Board of Managers of the GP approving the Memoranda and the agreements.
2. Get the prospectus reviewed by depositary and AIFM
3. Open a transitory account with the depositary bank and pay initial capital (EUR 12,500)
4. Prepare the start of the Fund operations with the depositary, the AIFM and the central administration

Create a RAIF

Now that you’ve checked if you are eligible, appointed the compulsory service providers and collected your documents, a Luxembourg notary public, will have to witness the creation of a RAIF. Within 15 days, the Luxembourg notary public will make sure that your vehicle is registered with the Luxembourg Trade and Companies Register.

Check out this infographic to see how to set up a RAIF at a glance. If you still want to know more about the main features of RAIF, read this post.