A comparative study of professional investor fund structures in the Maltese jurisdiction

Abstract

This research project focuses on comparatively and critically examining the different structuring options that can be employed in the constitution of PIFs in Malta under the current legal regime. The Introduction provides a legal definition, as well as the basic concept of a Collective Investment Scheme, and explores the advantages and disadvantages that investors and promoters face when dealing with this particular means of asset management. Chapter 1 introduces the different types of funds that promoters are able to set up within the Maltese jurisdiction, the various structuring options that these types of funds can utilise, and the investment strategies that can be accommodated by the fund. Chapter 2 focuses the work onto the subject of the Professional Investor Fund: it explores PIFs is in greater detail, as well as examining its advantages. It then discusses the three categories established by the MFSA, each having different prerequisites which investors must satisfy should they want to invest in them: PIFs promoted to Experienced Investors, PIFs promoted to Qualifying Investors, and PIFs promoted to Extraordinary Investors. Chapter 3 then critically examines the different legal structures that may be used by PIFs. It discusses the advantages and disadvantages of setting up a PIF as a SICAV, an INVCO, a Limited Partnership, a Unit Trust and a Common Contractual Fund. Moreover, the work explores the different applications that each particular structure is suited to, the strengths and weaknesses of each option, and it also aims to pinpoint aspects of each structure which could be improved. Finally, the conclusion briefly explores the impact that the PIF regime has had upon the financial services landscape in the Maltese jurisdiction, innovations which are being discussed at the time of writing, as well as touching upon the important position that PIFs hold within the funds industry in Malta.