The Reserved Alternative Investment Fund (RAIF) is an innovative Luxembourg-domiciled vehicle that can be utilized for investing in all types of assets. Due to its unregulated nature, Reserved Alternative Investment Funds are not subject under the Commission for the Supervision of the Financial Sector (CSSF) but are managed by authorized Alternative Investment Fund Managers with passporting rights that allow them to market partnership interests and shares to well-informed investors in Luxembourg and other European Member states. To know more about the Reserved Alternative investment fund, please liaise with your Damalion experts.
Reserved Alternative Investment Fund (RAIF) in Luxembourg — what it means, who can invest, governance, asset scope, and 2025 compliance notes.
For fund sponsors, AIFMs, institutional investors, family offices and private wealth • Damalion helps scope, prepare files and coordinate with service providers. Bank, AIFM and other acceptances remain at each provider’s discretion.
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RAIF in simple terms
A RAIF is a Luxembourg alternative investment fund for well-informed investors. The fund is not authorised by the CSSF as a product. It must appoint an authorised external AIFM. When the AIFM is EU-authorised, the fund can be marketed to professional investors across the EU under AIFMD rules.
Legal forms and strategy choices
| Topic | Option | Notes |
|---|---|---|
| Legal form | Partnerships (SCSp/SCS), SICAV/SICAF company, or common fund (FCP) | Form depends on strategy, governance and target investors. |
| Asset scope | Broad (private equity, real estate, infrastructure, private credit, etc.) | Specific limits may apply if you choose special frameworks (e.g., risk capital). |
| Diversification | “SIF-like” risk-spreading by default | A RAIF that invests only in risk capital may elect a risk-capital regime similar to SICAR. |
| Tax profile | Subscription tax (0.01%) or SICAR-like regime for risk capital | Check VAT, treaty access and investor jurisdiction impacts with advisors. |
| Compartments | Yes | Umbrella with segregated sub-funds is common. |
Key parties
- AIFM. EU-authorised AIFM is mandatory (external). Responsible for portfolio and risk management.
- Depositary. Located in Luxembourg. Safekeeping, cash flow oversight, and monitoring duties.
- Administrator. NAV, investor register and reporting support.
- Auditor. Annual audit of the fund financial statements.
- Distributor(s) / Placement. Marketing under AIFMD passport to professional investors; national rules apply.
Set-up and running items
- Draft documents: offering document, partnerships or corporate statutes, depositary and AIFM agreements.
- Service onboarding: AML/KYC on sponsor and key persons, investment strategy summary, pipeline evidence where relevant.
- Time to launch: often faster than regulated products after files are complete.
- Ongoing: reports under AIFMD, audited accounts, investor communications, and any SFDR disclosures.
Related reading
Frequently asked questions
1) What is a RAIF under Luxembourg law?
A RAIF is a Luxembourg alternative investment fund created by the law of 23 July 2016. It is an AIF that is not authorised by the CSSF as a product. It must appoint an authorised external AIFM. It is open only to well-informed investors.
2) Who qualifies as a “well-informed investor”?
Professional investors under MiFID qualify. Other investors may qualify if they confirm awareness of risks and meet a minimum investment threshold under the law, or are assessed by a credit institution, investment firm, or management company as having the expertise.
3) Is CSSF approval needed?
No product authorisation. Ongoing supervision focuses on the AIFM. The RAIF must still comply with all applicable laws and with AIFMD through its AIFM.
4) Is an AIFM mandatory?
Yes. A RAIF must appoint an authorised external AIFM. Internal management is not the norm for a RAIF.
5) Can a RAIF market in the EU?
Yes, when managed by an EU-authorised AIFM, it can be marketed to professional investors via the AIFMD passport, subject to national procedures.
6) Which legal forms are available?
Common choices are partnerships (SCSp/SCS), corporate SICAV/SICAF forms, or a common fund (FCP). Choice affects governance, liability, and tax items.
7) Are compartments allowed?
Yes. A RAIF can be set up as an umbrella with segregated sub-funds. Each compartment may have its own policy and service terms.
8) What are the asset and diversification rules?
By default, a RAIF applies risk-spreading rules similar to SIF. A RAIF that invests only in risk capital may elect a risk-capital regime similar to SICAR.
9) What is the tax profile?
Most RAIFs are exempt from corporate income tax and net wealth tax but pay a 0.01% subscription tax on net assets (with standard exemptions). If the RAIF elects the risk-capital regime, subscription tax does not apply and a SICAR-like tax regime is used for qualifying assets.
10) Who is the depositary and what is its role?
A Luxembourg depositary is required. It safekeeps assets, monitors cash flows, and oversees certain actions under AIFMD rules.
11) What financial statements and audits are required?
Annual audited financial statements are required. Accounting standards and reporting format follow the fund’s constitutional documents and applicable law.
12) What are the AIFMD reporting duties?
The AIFM files Annex IV reports and meets risk management, liquidity, valuation, and leverage requirements, as applicable to the strategy.
13) Can a RAIF invest through private credit or loan origination?
Yes, subject to AIFMD and local rules. AIFMD II introduces new conditions for loan-originating AIFs. Luxembourg is preparing transposition. Sponsors should align policies (risk retention, leverage, concentration) with the new framework.
14) Can a RAIF adopt the ELTIF label?
It may be possible to structure a RAIF that also complies with ELTIF 2.0 where all ELTIF requirements are met (including eligible assets, portfolio limits, and product disclosures). Check compatibility with the AIFM and depositary.
15) How do SFDR disclosures apply?
SFDR applies at manager and product level. The RAIF’s documentation must reflect Article 6/8/9 classification, PAI statements if in scope, and any RTS templates as updated in 2025.
16) What are typical set-up steps?
Choose legal form and strategy, appoint AIFM/depositary/administrator/auditor, prepare the offering document and service agreements, complete AML/KYC, and register marketing where needed.
17) What is the usual timeline?
Launch can be faster than regulated funds once providers are appointed and documents are complete. Time depends on complexity and investor markets.
18) Are retail investors allowed?
A RAIF targets well-informed investors. Marketing to retail is not standard. Any broader access must follow applicable EU and national rules and labels.
19) Can the RAIF pay carried interest or performance fees?
Yes, if set out in the documents. Terms must be clear, consistent with law, and aligned with the AIFM’s remuneration rules.
20) Do national private placement rules still matter?
Yes. Even with passporting to professional investors, local filings or notifications may be needed. Always check each target country’s rules.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
