SIF in Luxembourg, specialised investment fund.
A SIF is a Luxembourg specialised investment fund, authorised and supervised by the CSSF, reserved for well-informed investors and open to all asset types under a risk-diversification requirement. FSL handles accounting, NAV calculation, substance and reporting. FSL handles structuring, substance, accounting and reporting; CSSF authorisation and reserved acts are coordinated with our network of partner lawyers and notaries.
The SIF (specialised investment fund, law of 13 February 2007) is a Luxembourg fund reserved for well-informed investors, subject to CSSF authorisation, able to invest in a broad range of assets under a risk-spreading principle.
Law of 13 February 2007 on specialised investment funds; CSSF supervision and authorisation; 0.01% subscription tax. Management by an AIFM depending on thresholds (law of 12 July 2013).
Key takeaway
- The SIF is CSSF-authorised and requires risk diversification.
- Reserved for well-informed investors; 0.01% subscription tax.
- FSL operates the SIF (accounting, NAV, reporting); authorisation is coordinated with the lawyer.
What does the SIF Law of 13 February 2007 actually require?
The SIF Law sets four structural requirements, and leaves the rest to organisational freedom. First, access is reserved to well-informed investors. Second, assets must be invested on the risk-spreading principle. Third, net assets must reach 1,250,000 euros within twelve months of authorisation. Fourth, a depositary and a réviseur d'entreprises agréé must be appointed.
One point is widely misunderstood: since the amendment of 26 March 2012, CSSF authorisation is prior. A SIF cannot begin activity on the strength of a filed application. Constitutional documents, the offering document, the choice of depositary and the identity of the directors are reviewed before launch, and any material change afterwards follows the same approval logic.
Outside that framework the law leaves considerable latitude. No asset class is excluded in principle. The SIF can be set up with compartments, each with its own investment policy and ring-fenced liabilities, and can take corporate form or the form of a common fund. That combination of tight eligibility constraints and broad strategic freedom is precisely what explains the regime's longevity.
Who qualifies as a well-informed investor under the SIF Law?
The qualification is not self-declared. The law recognises three categories. Institutional investors and professional investors qualify as of right. Any other investor qualifies if it confirms in writing that it adheres to well-informed investor status and meets one of two alternative conditions.
First alternative: investing at least 125,000 euros in the fund. Second: producing an assessment from a credit institution, an investment firm or a management company certifying its expertise, experience and knowledge to appraise the contemplated investment adequately. Directors and other persons involved in managing the SIF are also deemed well-informed.
The classic operational mistake is to treat that verification as a subscription formality. It is a regulatory control point: an incomplete register of confirmations is among the first observations raised on inspection. FSL structures subscription documentation so the evidence can be reconstructed at any time, alongside AML and KYC compliance.
Risk diversification: the 30% rule in practice
The law imposes risk spreading without setting a numerical content. It is CSSF Circular 07/309 that provides the operational benchmark: a SIF does not, in principle, invest more than 30% of its assets or subscription commitments in securities of the same nature issued by the same issuer.
Three qualifications often change the analysis. The rule does not apply to investments in targets that are themselves subject to at least equivalent diversification requirements. Short selling may not result in a short exposure exceeding 30% in securities of the same nature from the same issuer. And a compliance grace period is accepted during ramp-up and at the end of the fund's life.
For a strategy that is concentrated by nature, venture capital, infrastructure or real estate with few assets, the constraint can become blocking. That is the main reason for moving to the SICAR, which has no diversification requirement, or to the RAIF with the risk capital option.
How long does a SIF take to launch, and what does it cost?
On the files we observe, the period between initial scoping and authorisation commonly runs three to six months. The duration is not evenly spread: incorporation and offering document drafting take a few weeks, CSSF review dominates the calendar, and depositary selection can become the critical path where the strategy targets illiquid assets that few institutions will hold in custody.
Recurring cost breaks down into four main items: the depositary, the réviseur d'entreprises agréé, central administration, and the manager where an authorised AIFM is required. On top sits the 0.01% annual subscription tax on net assets, payable quarterly, with targeted exemptions notably for money market compartments and pension pooling vehicles. These are observed market orders of magnitude, not a quotation.
The economic arbitrage is simple to state: below a certain asset size, the fixed cost base of an authorised vehicle absorbs a share of return that investors will not accept. Asking that question before choosing the regime avoids a restructuring at eighteen months.
SIF, RAIF or SICAR: the real trade-off
The SIF is authorised and supervised directly by the CSSF. The RAIF is not: it derives its standing from its manager's authorisation, which removes the prior review and brings launch time down to six to ten weeks. The SICAR is a regime dedicated to risk capital, with no diversification constraint, and is treaty-eligible where it takes corporate form.
The choice turns on three variables, in this order. Fundraising timetable: if a closing is already committed, the SIF's prior review is often disqualifying. Investor profile: some institutional investors, notably in Germany and Switzerland, retain a documented preference for a directly supervised vehicle. Strategy concentration: beyond a certain level, the 30% rule rules the SIF out.
No regime is intrinsically superior to another. What does exist is a costly mismatch between the regime chosen and the project's binding constraint. See the RAIF, SIF and SICAR comparison.
Ongoing SIF obligations: NAV, annual report and reporting
Net asset value is calculated at least once a year and, in practice, at the frequency set in the offering document: monthly for liquid strategies, quarterly for the majority of closed-ended funds. The annual report must be made available to investors within six months of the financial year end.
To that add periodic prudential reporting to the CSSF, statistical returns to the Banque centrale du Luxembourg, and, where the SIF is managed by an authorised AIFM, AIFMD reporting on risk profile and leverage. The SIF does not prepare consolidated accounts in the ordinary sense: compartment-level presentation prevails.
The operational risk factor is almost never production itself, but synchronisation between the depositary, central administration and the manager at each valuation date. FSL runs fund accounting, NAV calculation and investor reporting, and coordinates that chain. See fund accounting and AIFM support.
SIF vs RAIF vs SICAR
| Criterion | SIF | RAIF | SICAR |
|---|---|---|---|
| CSSF authorisation | Yes | No (authorised AIFM) | Yes |
| Assets | All, diversified | All | Risk capital |
| Diversification | Yes | Yes (except option) | Not required |
| Launch time | Longer (authorisation) | 6 to 10 weeks | Longer (authorisation) |
Who this is for
- Managers and sponsors seeking a regulated vehicle
- Well-informed investors (institutional, professional, qualified)
- Multi-asset strategies needing a supervised framework
What we do
- SIF scoping (form, compartments) and two-tier structure
- Fund accounting and NAV calculation
- Investor and regulatory reporting support
- Substance, domiciliation and CSSF / depositary / auditor coordination
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Preparation checklist
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The process, step by step
Structuring
Choice of form, compartments, AIFM and depositary; investment-policy scoping.
Authorisation & launch
Incorporation and CSSF authorisation file (led by the lawyer); accounting set-up and substance.
Ongoing operation
Accounting, NAV, investor and regulatory reporting, annual accounts.
Frequently asked questions
What is a SIF in Luxembourg?
SIF or RAIF?
What taxation for a SIF?
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