Professional Investor Funds in Malta (PIFs) are a special class of collective investment schemes which fall within the provisions of the Investment Services Act, 1994. These funds provide a “lighter” regulatory regime and more flexibility than UCITS, AIFs and other funds which are also licensed by the MFSA. PIFs are subject to minimal regulation compared to retail investment schemes. Professional Investor Funds have been extensively used for investment in non-traditional investments and/or specialist instruments including by way of example, private equity, derivatives, immovable property / real estate, and traded endowment plans.
Categories of Professional Investor Funds
A PIF may only be promoted to specified categories of investors and the licensing and ongoing regulatory obligations of the PIF depend on the category of target investors. The PIF regime is divided into three broad categories, based on the participating investors’ wealth and experience, with the regulatory regime being relaxed proportionally to the minimum entry threshold required from each individual investor. There are 3 different types of PIFs, each with its own parameters as set out below:
The key parties involved in a PIF structure are as follows: