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Investment Funds

We have extensive experience in fund structuring, formation and management.  The solution will be tailored to your specific needs by either (1) utilising the Axion Funds SICAV Platform or otherwise (2) forming Your Own Funds Structure, which can take the form of an AIF, UCITS, PIF, other.

 

Launch a Fund on our Axion SICAV Platform

 

We understand the importance of be operational in the shortest possible time, done in a cost effective way by a team of experts and experienced people who can immediately understand your needs and soon after structure the right solution for you. With this in mind we formed Axion International Funds SICAV P.L.C., which is a Funds Platform, where:

  • You can easily and quickly launch your fund without having the set-up costs as a hurdle

  • Initial capital was already paid by us and thus all money raised can be utilised for the intended investments

  • Depending on how large / structured you are, we will tailor our solution to fill your needs and regulatory requirements

  • You will have the assistance of a professional group of people during set-up and ongoing

  • Set-up and annual costs are affordable even for relatively small funds

  • You will not need to find the different service providers since the core structure is ready

  • Custodian/depositary is not required in most of cases and when needed we have the right to progress with.


Depending also on the investment strategy, the Funds Platform is typically used to start with funds between €2.5 million to €25 million. If the amount is smaller, we can discuss other possible options and if larger you might want to consider your own SICAV structure which we will set-up and structure for you.

 

Interested Parties

 

Typical interested parties for a fund set-up within the platform are: asset managers wanting to enter the EU market, small/new asset managers or investment bankers who do not have the scale to set-up something by themselves, but can pool some investors in a fund, investment advisors wanting an EU regulated structure enabling them to attract more investors, project owners, family offices and wealthy individuals.

Underlying Investments

The underlying investments of the funds can be various, including private equity, immovable property, infrastructure projects, commodities, equities, bonds, derivatives, crypto assets and others.

Investors

Investors in the funds are limited to the so called “Qualified Investors”, with a minimum investment of €100 K. Retail Investors you would require either a UCITS or AIF structure which we can also structure.

Legal Framework

Axion International Funds SICAV PLC is licensed by the MFSA in terms of the Malta Investment Services Act and it has subsequently issued segregated funds, the shares of which are available for sales to Qualified Investors. These funds provide a lighter regulatory regime, are more flexibility than UCITS and AIFs, do not require investment restrictions, whilst still being regulated in the EU.

Time to Launch


The time to launch is relatively short since the licensing process on the structure has been already concluded and the remaining part would be the additional components for the new fund. Once all the license conditions are fulfilled and the fund is enabled to start, we will coordinate all parties for a seamless launch.

Licensing

 

The licensing process which would otherwise be of around 6 months is materially shortened using the platform since the legal structure and the key people have already been pre-vetted by the Malta regulator. In conjunction with the due diligence process, we will discuss with you the objectives of your fund and draft the documents explaining how the fund will work and our relationship. Eventually we will progress matters with the Malta regulator till licensing, involving you only if necessary.

 

Listing

Depending on requirements, we can also obtain a Bloomberg ticker, ISIN and have a listing on an exchange.

 

Ongoing Management & Control


The Board will provide ongoing governance and control whilst the Investment Committee will be entrusted to establish and review the investments in line with the fund’s objectives and any restrictions, the extent of which will depend on your role and our agreement with you. Your involvement and responsibilities will be agreed and tailored in line with your experience, expertise, qualifications.

Launch a Fund on Your Own SICAV Structure

 

Apart from offering our own ready-made Funds Platform, for the bigger clients or otherwise those wanting to have their own funds' structure, we can also set-up this.  The available options include: PIFs, AIFs, UCITS and apart from Malta we can also do in other jurisdictions partly with other international partners.

Professional Investors Funds ("PIFs")

Governed by the Investment Services Rules in Malta, PIFs are mostly common for the setting up of Hedge Funds as well as for a number of different fund strategies involved into Private Equity, Real Estate and Venture Capital.

Advantages of PIFs

  • Flexibility – PIFs have minimal investment restrictions

  • Costs - low

  • Borrowing – up to 100% of NAV

  • Self-managed – PIFs can opt to be self-managed by an Investment Committee

  • Choice to appoint service providers – Custodian, manager or administrator are not mandatory.

Qualifying Investors' Requirements

  • Invest a minimum of Eur100k or equivalent, which investment may not be reduced below such a minimum at any time by way of partial redemption

  • Declare in writing that they are aware of and accept the risks associated with the proposed investment;

  • Satisfy, at least, one of the following:

  • A body corporate which has net assets in excess of Eur750k or which is part of a group which has net assets in excess of Eur750k or, in each case, the currency equivalent thereof

  • An unincorporated body of persons or association which has net assets in excess of Eur750k or the currency equivalent;

  • A Trust where the net value of the Trust’s assets is in excess of Eur750k or the currency equivalent

  • An individual whose net worth or joint net worth with that of a person’s spouse, exceeds Eur750k or the currency equivalent

  • A senior employee or a director of a service provider to the fund.

 

PIFs are subject to private placements only and do not benefit from the passport rights within the EU/EEA as carried by the AIFs and UCITS.

Notified PIFs ("NPIFs")

The below list lays down the main features and advantages of such regime:

 

  • Not subject to the licensing process by the MFSA but are only Notified to the MFSA;

  • Not subject to investment restrictions, except for certain lending activities.

  • Can be both open-ended and close-ended;

  • Cannot be self-managed but managed by de minimis AIFMs or third-country licensed AIFMs (subject to some conditions);

  • NPIF to appoint a third-party service provider on due diligence, both at notification and ongoing.

Alternative Investment Fund Managers Directive ("AIFMD")

 

Fund managers and promoters may opt for a De Minimis hedge fund licence which is less onerous than the AIFMD.  For a self-managed hedge fund having its day-to-day portfolio management engaged within an investment committee as appointed by the Directors of the Fund, the AIF must have an AUM of less that Eur100 million – including assets held on leverage, or else have an unleveraged AUM of not more than Eur500 million and a redemption gate to investors of not less than 5 years.

 

In applying the above criteria, the notional value of the assets must be considered.

Alternative Investment Funds ("AIFs")

These are Collective Investment Schemes, including their sub-funds, which raises capital from a number of investors, with a view of investing it in accordance with a defined investment policy for the benefit of those investors, and which does not qualify as an Undertaking for Collective Investment in Transferable Securities (UCITS) in terms of the UCITS Directive.  Thus, hedge funds, private equity funds, real estate fund and venture capital funds fall within AIFMD.

AIFMD is applicable to:​

 

  • Fund manager established in or outside the EU, managing and/or marketing their AIFs in the EU;

  • Fund managers established in the EU, managing and / or marketing AIFs;

  • Collective Investment Schemes (other than UCITS), marketed in the EU or managed by an EU/EEA manager of alternative investment funds.

AIFs are required to appoint​:

 

  • Custodian / Depositary having substance in Malta and authorised by the MFSA;

  • AIFM when AIF is third party managed (when AIF is self-managed, it needs to have an Investment Committee);

  • Compliance Office;

  • MLRO;

  • External Valuer appointed by AIFM (when self-managed, by the AIF).

AIFs main benefit is that once approved by an EU regulator, they can trade across the whole EU.

Notified AIFs ("NPIFs")

 

The process of notification should apply to AIFs which are promoted to Qualifying Investors.  Funds falling within the scope of the notification process shall be managed by a Full-Scope AIFM.  The below list lays down the main features and advantages of such regime:

 

  • NAIF is not subject to the licensing process by the MFSA but are only Notified to the MFSA;

  • Onus of due-diligence and ongoing supervision lies within the AIFM;

  • NAIF can be both open-ended and close-ended;

  • NAIF cannot be self-managed;

  • NAIF cannot be in the form of a loan fund or invest in non-financial assets;

  • AIFM is to appoint a MLRO as an oversight over the NAIF.

Undertaking for Collective Investment in Transferable Securities

Undertaking for Collective Investment in Transferable Securities ("UCITS") are harmonized European retail fund products that can operate throughout the EU based on a single authorisation from one member state, if it follows certain notification procedures. UCITS offer a high degree of investor protection and are recognised by regulators worldwide.

UCITS are required to at least appoint a:

 

  • 3 Directors

  • Custodian / Depositary having substance in Malta and authorised by the MFSA

  • Manager when UCITS is third party managed (when UCITS is self-managed, it must be managed by a Company approved by the MFSA)

  • Compliance Office

  • MLRO

  • Administrator.

The Scheme’s HO and registered office are to be both established in Malta.​

UCITS main benefit is that once approved by an EU regulator, they can be marketed to both retail and institutional investors.  Malta-based UCITS wishing to market their units outside Malta must inform the MFSA of their intention and await confirmation that the host regulators have been notified.

Funds' Tax​

Funds in Malta are classified as either prescribed or non-prescribed funds.  A prescribed fund is one which has declared that the value of its assets situated in Malta amount to at least 85% of the value of the total assets of the fund.  Maltese resident funds which do not have such an exposure to Maltese assets and all non-resident funds are treated as being non-prescribed.

 

Non-prescribed funds are exempt from Maltese income tax on any income and capital gains (except when they hold property in Malta).  Additionally, through the use of double taxation agreements, funds are in a position to claim any tax imposed by other countries on their underlying investments.

Investors' Tax

  • Capital or income gains realised by non-resident investors are not subject to tax in Malta.   

  • There are no NAV or subscription tax.

 Fund Manager, Promoter or Staff's Tax

  • Fund Management companies operating in Malta are entitled to avail themselves of Malta’s full imputation tax system and refunds (same procedure applicable to a company, partnership or trust). 

  • On an individual basis, fund managers may also avail themselves of the Malta Highly Qualified Persons Rules allowing them a flat tax rate of 15% and tax exemption when income exceeds a threshold amount.

VAT

Where the service provide to a fund is specific to and essential for the core activity of the scheme (example: management and administration), no VAT is applicable.  Other services will incur VAT at 18% and this is not recoverable.

Funds' Redomiciliation

Why?

There are various reasons why a fund would want to redomicile (change its jurisdiction) to Malta, these including changes in the political, economic and fiscal environment and/or the need towards transparency and compliance.

Re-domiciliation is allowed from all EU, EEA and OECD member states, as well as other jurisdictions including the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey, the Isle of Man, and Jersey.  Malta is proving ever more appealing for promoters / fund managers looking to re-domicile from an offshore to a safe and stable EU onshore jurisdiction.

How?

Re-domiciliation of a licensed entity, such as a fund, to Malta requires the authorization from the MFSA and the general procedure will involve the following:

 

  • Application for a licence, including all required relevant documentation in draft form;

  • Progress with the Registrar of Companies, as in case of an unlicensed company;

  • The MFSA would then request certain due diligence and vet the documentation submitted as well as the structure of the existing fund;

  • If there is an 'in principle' approval, the Authorisation Unit of the MFSA would then liaise with the Registrar of Companies so that licensing would occur simultaneously with registration.

Any custody or brokerage agreements could also remain in force, since with some exceptions, Malta allows for the possibility of the service-providers being based outside Malta. 
 

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