Multiple Investment Compartments - Separate investment policies - Segregation of assets and liabilities - High level of flexibility to investors
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
For more information check Alternative Funds (AIF) or contact Michael O. Ioannides.