What are Professional Investor Funds (PIFs) in Malta
Professional Investor Funds in Malta (PIFs) are investment companies that do not solicit capital from retail investors or the general public; public offers are prohibited.
An investment fund must meet the criteria outlined in the fund regulations to be classified as Professional Investor Funds in Malta (PIFs). Maintaining private investment fund status is advantageous, as the regulatory and legal requirements are much lower than those for publicly traded funds.
Which Investment classes are suitable for a PIF?
Professional Investor Funds in Malta (PIFs) are flexible investment vehicles that allow a more comprehensive range of “Alternative Investments” according to individual needs. The Maltese Law classifies three types of PIFs, targeting different investors: experienced, qualifying, and extraordinary.
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The Maltese Law distinguishes three different types of PIFs
PIFs – Professional Investor Funds – Amendments 2017
- There have been some regulatory changes recently, and they came in force in 2017, meaning that the former classification will no longer been applicable. Now, just the following rules will apply:
- Available to investors who can meet the criteria of an experienced investor
- Most common and practical approach, seeking widest flexibility in terms of investment strategies
- Promoted to investors with a higher degree of financial sophistication
- Entry level to a Qualifying PIF is set at €100,000 or other main currencies
- No monitoring/oversight responsibilities required from the custodian.
- Wealth in excess of €750,000 for Corporate bodies, individuals and trusts.
PIFs promoted to Experienced Investors – Experienced Investor Fund – No longer Applicable
- Available to investors who can meet the criteria of an experienced investor
- Entry level set at €10,000 or other main currencies
- Direct borrowing and leverage via the use of derivatives is limited to 100% of NAV
- A minimum set of investment restrictions must be adhered to
- Subject to the oversight of a custodian which is required to monitor the fund and ensure compliance with investment restrictions
PIFs promoted to Qualifying Investors – Qualifying Investors Fund – No longer Applicable
- Most common and practical approach seeking widest flexibility in terms of investment strategies
- Promoted to investors with a higher degree of financial sophistication
- Entry level to a Qualifying PIF is set at €75,000 or other main currencies
- No monitoring/oversight responsibilities required from the custodian.
PIFs promoted to Extraordinary Investors – Extraordinary Investors Fund – No longer Applicable
- Similar in nature to a Qualifying PIF
- A minimum investment of €750,000 with no investment restrictions at all
- No restrictions to leverage – Unlimited leverage
- Appointment of a custodian is not mandatory (provided assets are subject to adequate safekeeping arrangements)
- No need to publish Offering Memorandum – Marketing document would suffice
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