SIF in Luxembourg, specialised investment fund.

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 100,000 euros in the fund. That threshold was lowered from 125,000 to 100,000 euros by the Law of 21 July 2023; the 125,000 figure is still widely published, including on provider pages. Second alternative: 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 no longer applies

The law imposes risk spreading without setting a numerical content. The operational benchmark used to be CSSF Circular 07/309 and its 30% rule. That circular was repealed by CSSF Circular 25/901 of 19 December 2025, together with Circulars 02/80 and 06/241. The 30% rule no longer applies: the figure appears nowhere in the new text.

The regime introduced by Circular 25/901 scales the limit to the investor base. A SIF is by construction reserved to well-informed investors, so the limit that applies to it is 50% of its assets or subscription commitments in one and the same entity, one and the same collective investment undertaking, or one and the same other asset, raised to 70% where the fund invests in infrastructure. The stricter tier, 25% as a rule and 50% in infrastructure, applies to funds that can be marketed to non-well-informed retail investors: it does not apply to a SIF.

The consequence is direct: the limit applying to a SIF moves from 30% to 50%. The CSSF may also grant further derogations on a reasoned request.

This loosening changes the vehicle trade-off. A strategy that is concentrated by nature, venture capital, infrastructure or real estate with few assets, often moved to the SICAR, which has no diversification requirement, or to the RAIF with the risk capital option, in order to escape the 30% limit. That reason for switching is worth revisiting since December 2025.

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: since CSSF Circular 25/901 of 19 December 2025, the limit applying to a SIF reserved to well-informed investors is 50%, no longer 30%, which makes the SIF workable for strategies it previously ruled 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.