EIFs were introduced in 2005 and are lightly regulated. They presently require a Gibraltar authorised Administrator and two Gibraltar authorised directors to ensure appropriate governance. The EIF auditor must also be a Gibraltar firm, but there is complete freedom on the choice of depository services and investment manager and there is no limit on the number of investors, making these vehicles very attractive for hedge fund managers based elsewhere in Europe and the US.
EIFs are designed for investors who are investment professionals or who are high net worth individuals, with at least EUR1million in net assets. This qualification is a self certification process and does not require any supplementary evidence to be provided. More commonly, they are available for those investors who can commit a minimum investment of EUR100,000, or when advised by a regulated advisor, a minimum of EUR 50,000. For investors in existing funds re-domiciling to Gibraltar as EIFS, other limits may be accepted.
EIFs enjoy a streamlined process for establishment and registration, simply requiring either a post notification to the Regulator by the Administrator within 10 days of commencing operations, or a pre notification process, whereby the Regulator undertakes to respond within 10 days. This notification has to be accompanied by an opinion from a Gibraltar lawyer that the EIF and its formation and offer documents comply with the EIF regulations.
An EIF fund can set its own remit for its investment strategy and policies, provided that these are set out clearly in its offer document, along with all applicable risks and disclosures.