Malta has long been a hub for innovative fund management, and in 2023 the Malta Financial Services Authority (MFSA) unveiled its latest offering to assist smaller managers: the Notified Professional Investor Fund, or NPIF for short.
Put simply, the NPIF merges the appeal of Malta's existing Professional Investor Fund (PIF) framework with the benefits of "Notified" status, creating an efficient solution for fund managers. What sets NPIFs apart is their remarkable speed to market, making them a perfect fit for time-sensitive investment strategies.
The NPIF targets de minimis Alternative Investment Fund Managers (AIFMs) with Assets Under Management (AUM) of less than €100 million when leveraged or €500 million when unleveraged, qualifying for the lighter regulatory regime defined by the EU's AIFM Directive, as well as third-country AIFMs in a wide range of non-EU third-party domiciles, which are not bound by AUM ceilings, provided that they are authorised by a third party equivalent and are accepted by the MFSA.
What are the key benefits of the NPIF?
- Rapid Time to Market: NPIFs boast an incredibly swift setup, with just 10 business days required to launch. There is no need for prior authorization from the MFSA.
- Cost Efficiency: Setting up and operating NPIFs comes with reduced expenses compared to traditional funds, making them an attractive option for emerging managers.
- Flexible Management: NPIFs can be managed by authorized de minimis Alternative Investment Managers (de minimis AIFMs) or third country AIFMs.
- Investor Protection: The NPIF framework ensures full compliance with the PIF regime, ensuring investors are safeguarded.
- EU-Wide Capital Raising: NPIFs can raise capital across the EU, following national provisions in respective jurisdictions.
- Diverse Banking Options: Any reputable local or international bank is acceptable for NPIFs.
- Structural Flexibility: NPIFs can take various legal forms, including SICAVs, INVCOs, incorporated cell companies, RICCs, limited partnerships, unit trusts, and contractual funds.
- Indirect Supervision: Although not subject to ongoing direct MFSA supervision, NPIFs are monitored by an appointed service provider, often the fund administrator, under competent authority supervision.
Are there any limitations?
Yes, NPIFs are restricted to promotion among Qualifying and Professional Investors, each with a minimum investment of €100,000.
Which non-EU domiciles are eligible?
NPIFs can be managed by third country AIFMs from jurisdictions with which the MFSA has cooperation agreements or memoranda of understanding on securities regulation. The list is extensive and subject to change, so it is advisable to refer to the ESMA website for the most current information.
The Notification Process
Setting up an NPIF involves a straightforward notification process:
The NPIF's board of directors approves the Offering Documents, ensuring they meet MFSA's minimum criteria. A written request for inclusion in the list of Notified PIFs is submitted by the NPIF's governing body. The completed notification request, along with accompanying documents, is then filed with the competent authority within 30 calendar days. The competent authority then includes the NPIF in the List of Notified PIFs within 10 working days.
How can we assist you?
Trident Fund Services (Malta) Ltd is an experienced regulated fund administrator and offers a comprehensive suite of services for setting up and maintaining NPIFs.
For more information, please refer to our detailed Key Facts Sheet or contact Keith Zammit or Aaron Sammut in our Malta team.