Experienced Investor Funds
The Experienced Investor Fund (EIF) regulations were introduced in August 2005.
An EIF is an authorised collective investment scheme exclusively for investment by experienced investors and is designed to invest in a wide range of traditional or alternative asset classes.
One of the attractions of Gibraltar as a fund domicile is that no regulatory approval is required before a fund can begin to raise capital and commence with its investment activities. A fund may be launched based on a legal opinion that confirms that the fund has met all legal and structural requirements for its operations, and provided that the fund’s documentation is submitted to the regulator for registration within 10 business days of its launch. An EIF can market its shares or units to experienced investors and begin trading, from the time the EIF is officially launched.
The advantages of an EIF are:
• pre-launch approval mechanism
• no investment or borrowing restrictions
• may be self-managed
• expedited start-up process and competitive start-up costs
• no limit to the number of investors
• reasonable ongoing operating costs
• tax neutrality
• benefit of EU directives
• an EIF may be structured under a variety of formations
Common EIF structures include:
• a Gibraltar limited company, unit trust or limited partnership
• other form recognised by the FSC
• a Protected Cell Company
An Experienced Investor must fulfil any one of the following conditions in order to be considered an Experienced Investor:
• a person or partnership whose ordinary business or professional activity includes, or it is reasonable to expect that it includes, acquiring, underwriting, managing, holding or disposing of investments, whether as principal or agent, or the giving of advice concerning investments
• a body corporate which has net assets in excess of €1,000,000 or which is part of a group which has net assets in excess of €1,000,000
• an unincorporated association which has net assets in excess of €1,000,000
• the trustee of a trust where the aggregate value of the cash and investments which form part of the trust’s assets is in excess of €1,000,000
• an individual whose net worth, or joint net worth with that person’s spouse, is greater than €1,000,000, excluding that person’s principal place of residence
• a participant who has a current aggregate of €100,000 invested in one or more experienced investor funds
• a participant who invests a minimum of €50,000 in an experienced investor fund and who has been advised by a professional adviser to invest in the fund and the fund’s administrator has received confirmation of such advice
• a participant who is a professional client, as defined under the Financial Services (Markets In Financial Instruments) Act 2006
• a participant in a fund that has re-domiciled to Gibraltar where the Authority has permitted the inclusion of such participant either in respect of a specific fund or generally in respect of funds or a category of funds from a certain jurisdiction
EIFs and their managers complying with the authorisation process of the Alternative Investment Fund Managers Directive (AIFMD) will receive a pan European marketing passport thus enabling Alternative Investment Fund Managers (AIFMs) to passport the Alternative Investment Funds (AIFs) they manage and market them to professional investors across the EU.