New category of investment funds in Switzerland reserved for qualified investors – L-QIF

Ticino Management - December Edition Newspaper

As of March 1, 2024, Switzerland has introduced a new category of investment funds called the Limited Qualified Investor Fund (L-QIF). The L-QIF aims to enhance the competitiveness of the Swiss financial market by offering a product inspired by the Luxembourg RAIF, but it is exclusively available to qualified investors.

Notably, the L-QIF does not require authorization or approval from FINMA and is not under its supervision. Instead, its administration must be handled by institutions under FINMA's oversight, ensuring an indirect level of investor protection. The L-QIF must also be notified to the Federal Department of Finance (FDF), which maintains a public list of these funds.

While the L-QIF offers greater flexibility, its lack of direct supervision entails higher risk for investors. Qualified investors include financial intermediaries, insurers, and pension institutions, as well as wealthy private clients under certain conditions. However, L-QIFs investing directly in real estate are restricted to specific professional clients, which could limit their attractiveness. The Swiss financial market still faces competitive disadvantages, such as the withholding tax.