Open-Ended Funds
Retail funds can either be structured as open-ended or closed-ended investment funds. Open-ended retail funds can take the form of a contractual fund or a SICAV.
Contractual funds are based on a tripartite collective investment agreement (fund contract) between the investor, the fund management company and the custodian bank. The majority of open-ended retail funds in Switzerland are set up as contractual funds.
SICAVs are investment companies with variable capital that are, to a large extent, subject to the provisions of the Code of Obligations on companies limited by shares with the following characteristics:
- The share capital and number of shares vary;
- The share capital is divided into company and investor shares;
- For whose liabilities only the company’s assets are liable; and
- The sole purpose is collective capital investment.
Closed-Ended Funds
Pursuant to CISA, closed-ended collective investment schemes can either be structured as:
- A SICAF; or
- A limited partnership for collective investment schemes
SICAFs
A SICAF is an investment company with fixed capital that is set up as a company limited by shares pursuant to the Code of Obligations with the following characteristics:
- The sole purpose of the company is the investment of collective capital;
- The shareholders are not required to be qualified shareholders in terms of the CISA (see question 27); and
- The company is not listed on a Swiss stock exchange.
To date, no SICAFs have yet been approved by FINMA. In practice, the promoters will prefer to list the company (or exclude its accessibility to retail investors), because investment companies limited by shares are out of the scope of the CISA and can therefore remain unregulated.
Limited Partnerships
A limited partnership for collective investment schemes is a limited partnership with the sole object of collective investment. At least one member bears unlimited liability (the general partner), while the other members (limited partners) are liable only up to a specified amount (the limited partner’s contribution).
Further, general partners must be companies limited by shares with their registered office in Switzerland. Limited partners must be qualified investors under CISA (see question 27).
Limited partnerships for collective investment schemes are specifically used for investment in risk capital (venture capital), construction, real estate and infrastructure projects and other alternative investments.
Investments in companies or projects can be in the form of equity capital, lending or mezzanine financing.
The investment policy must be set out in the partnership agreement.