Fund Schemes - Single and Multiple Scheme (Umbrella)
Multiple Investment Compartments - Different Investment Policies - Segregation of assets and liabilities between compartments
All types of Cyprus Alternative Investment Funds (such as AIFs, AIFLNPs, and RAIFs), can be set-up as single scheme or umbrella fund with multiple investment compartments / sub-funds.
In umbrella funds each investment compartment is a separate and segregated asset pool with different investment policies, asset types and investor base.
Umbrella Funds offer investors a high level of flexibility as they may switch investment strategies by switching investment compartments, easily, quickly and cost-efficiently.
Each compartment:
- is subject to the provisions of the Law as a separate AIF but all compartments constitute a single legal entity
- issues units that correspond to its assets and have different values;
- investors’ rights derive from the assets of the relevant investment compartment in which they are invested in, thus ensuring the ring fencing/segregation of the assets and liabilities of each compartment;
- may invest to another compartment but there are certain restrictions in the AIF law concerning the total position (up to 35%) and calculation of management fees shall avoid double counting;
- may have its authorisation revoked by CySEC, be dissolved or liquidated separately without affecting the other compartments.
The Umbrella AIF:
- is dissolved or liquidated only after all investment compartments are dissolved or liquidated;
- prepares consolidated financial statements at year end grouping the performance of the fund.
Umbrella Fund or Multiple Scheme are both used and have the same meaning
Investment Compartment or Sub Fund are both used and have the same meaning
Investment Compartments do not have separate legal personality and are not considered as separate legal entity however their assets and liabilities are segregated
Related Articles
Cyprus Fund Industry Association
Τhe Cyprus Fund Industry Association is Cyprus Investment Fund Association (CIFA). CIFA was established in February 2013 and registered as an Association in April of the same year under the Associations and Foundations Law of 1972. The reason for the ...European Fund Industry Regulator
The European Securities and Markets Authority (ESMA) is the independent European regulator of the fund industry. ESMA was founded in 25/11/2010 by the European Regulation 1095/2010 establishing a European Supervisory Authority (European Securities ...Cyprus Fund Industry Regulator
Cyprus Securities and Exchange Commission is the public authority responsible for the regulation of the Fund Industry in Cyprus The Cyprus Securities and Exchange Commission (CySEC) is the independent public supervisory Authority responsible for the ...Professional Investors
Professional investor is generally an investor who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risk that it incurs. In order to be considered a professional investor, the entity or ...The Types of Alternative Investment Funds in Cyprus
The three available fund structures in Cyprus are the AIF for Unlimited Number of Persons (AIF), the AIF for Limited Number of Persons (AIFLNP) and the Registered AIF (RAIF) The Alternative Investment Funds Law of 2018 provides for three types of ...