€100m where there is leverage; or
€500m for AIFMs managing only unleveraged AIFs with no redemption rights exercisable within 5 years from the date of initial investment in each AIF
The AIFMD directive applies to AIFM where the AUM is greater than:
The AIFMD framework provides for a lighter or de minimis regime for small AIFMs below these thresholders.
How this is applied in Malta is summarised below.
Malta and the De Minimis Regime
While AIFMD allows Member States to choose merely to register rather than authorise de minimis AIFMs, the MFSA’s policy in the interest of investors is to require authorisation as de minimis Category 2 Licence Holders.
Once authorised, a de minimis AIFM will be exempt from complying with the provisions of the AIFMD with the exception of certain reporting requirements towards the MFSA such as:
The investment strategies of the AIFs under management
The main instruments in which the AIFs under management are trading
The principal exposures and most important concentrations of the AIFs under management
Any AIFM whose assets under management fall below the above thresholds may choose to opt in to the AIFMD framework.
This would render it subject to all the obligations applicable to full-scope AIFMs, but would also enable it to make use of the EU passporting rights deriving from the AIFMD.
PIFs And AIFMD
The most popular fund type in Malta is the Professional Investor Fund (PIF), which is a hedge fund product.
See Funds-Axis Guide to Malta PIFs.
PIFs are a hedge fund product, but which falls short from being classified as an Alternative Investor Fund (AIF) having regard to the above threshold requirements. Where they exceed the threshold requirements or where they choose to opt-in, then the PIF would fall instead under the Malta AIFMD rules.
PIFs enjoy more investment flexibility than AIFs and do not need to comply with a number of transparency obligations. Equally, they do not benefit from the passporting rights that come with AIFMD. Hence, PIFs are usually sold on a private placement basis and are not actively marketed to the public and Managers do not require.
Some of the flexibility of PIFs is summarised below:
PIFs can adopt any investment strategy;
PIFs can have a single or multiple custodians (or none at all);
PIFs can appoint service providers based outside Malta (ideally based in a recognised jurisdiction); and
PIFs are subject to a “fast-track” processing commitment by the Malta Financial Services Authority (MFSA).