Multiple Investment Compartments - Different Investment Policies - Segregation of assets and liabilities between compartments.
Flexibility and Efficiency
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.
Understanding the Structure and Autonomy of Investment Compartments in Cyprus AIFs
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.
Unified Dissolution and Consolidated Reporting
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
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
