Simplified AIF structure launched in Guernsey

The fund is likely to be especially appealing to sub-threshold AIFMD managers.

An alternative fund regime with a one-day application process has been launched in Guernsey.

The Private Investment Fund regime is designed to be simpler, cheaper and more flexible than other fund structures. It was developed by the Guernsey Financial Services Commission.

The PIF can be either closed or open-ended, but can have no more than 50 investors. There is no limit on the number of investors to whom it can be marketed.

“[The PIF] recognises certain investment funds are characterised by a relationship between management and investors that is closer than that of a typical agent. It dispenses with the formal requirement for information particulars such as a prospectus in recognition of that relationship,” Guernsey Finance said.

While intended for long-term use, it will also act as a stop-gap until the jurisdiction is given an Alternative Investment Fund Managers’ Directive passport.

Its launch follows the unveiling of the territory’s Manager Led Product regime, which will place the regulatory burden on the manager and not the fund.

Under the MLP a single Guernsey-regulated investment manager is required, which means none of the related funds, general partners or managers formed solely for the purposes of those funds will have rules imposed on them by the GFSC.

“This could be beneficial at the time a third-country passport is granted, as to receive the benefit of a passport non-European Union alternative investment fund managers will need to comply with the same obligations as European Union alternative investment fund managers, abiding by the rules of AIFMD,” according to Bryon Rees, partner at Ogier.