Structuring a Malta Professional Investor Fund (PIF) as a European Venture Capital Fund (EuVECA)

The European Venture Capital Fund (EuVECA) regime is an EU-regulatory framework that enables fund managers to more easily channel venture capital into small and medium-sized enterprises (SMEs) with growth potential.

One of the biggest advantages of EuVECA is that it provides funds with a "passport" to market across all EU countries, eliminating the need for separate registrations in each country. This streamlined approach makes it easier for funds to raise capital and invest in young, innovative business across Europe.

Key Features of the EuVECA Regime

1. Investor Eligibility: EuVECA funds target professional investors and qualifying high-net-worth individuals, offering them the opportunity to invest in high-potential, unlisted SMEs.
2. Investment Focus: At least 70% of the fund’s assets must be invested in unlisted SMEs.
3. Cross-Border Flexibility: The EuVECA passport facilitates fund distribution in multiple EU countries, encouraging more investment in innovative businesses.

Can a Malta Professional Investor Fund be EuVECA-Qualified?

Yes, it can, provided it meets both Malta's PIF regulations and the EuVECA regulatory standards, and it is managed by a EuVECA-registered manager with assets under €500 million. This offers an attractive structure for fund managers aiming to access new EU markets while maintaining regulatory flexibility.

How It Works

To set up a Malta PIF as an EuVECA, fund managers must follow these steps:

1. Register with the Malta Financial Services Authority (MFSA) under the EuVECA framework.
2. Ensure the fund invests at least 70% of its capital in unlisted SMEs.
3. Comply with both PIF and EuVECA regulations to ensure robust investor protection.

Advantages of Structuring a PIF as an EuVECA:

1. EU-Wide Mark Access: The EuVECA passport allows the fund to market across the EU, expanding its reach and investor base.
2. Targeted Investor Base: EuVECA funds can target both professional investors and eligible high-net-worth individuals.
3. Lighter Regulatory Burden: EuVECA funds operate under a lighter touch regulatory framework than full scope AIFMD funds, resulting in lower operational costs.
4. Innovation-Focused: These funds are committed to investing in SMEs and startups, appealing to investors interested in high-growth, innovative businesses.
5. Enhanced Credibility: The EuVECA label signals a commitment to transparency, providing investors with greater confidence in the fund’s operations.

Next steps

In conclusion, structuring a Malta PIF as an EuVECA offers significant advantages for fund managers targeting SMEs across Europe, with benefits including cross-border marketing, regulatory flexibility, and a clear investment focus on innovation.

If you are interested in setting up a Malta PIF as an EuVECA or want to learn more about this unique investment structure, download our Key Facts Sheet or reach out to Keith Zammit, Director – Fund Services, in our Malta office, at kzammit@tridenttrust.com.