Hedge funds can be characterised by the following criteria:
Whereas in the past most Luxembourg alternative investment funds were created as Part II funds, the introduction of the specialised investment fund (SIF) in 2007 has successfully paved the path for a new generation of alternative investment funds for an international, qualified investor base. A convergence of traditional hedge fund products and UCITS products has also become noticeable. The RAIF structure allows hedge fund initiators to set up Luxembourg-domiciled hedge funds that are not subject to regulatory approval by the Luxembourg supervisory authority. This option permits the achievement of a significantly enhanced time to market for new fund launches.
The choice of legal form will largely depend on the investment strategy selected and the targeted investor base.