An alternative investment fund is a legal entity or pool of assets that includes the capital of a number of investors for the purpose of investing in accordance with the specific investment policy of the fund for the benefit of the respective investors and in their common interest. The fund must have a fund manager. The Investment Funds Act regulates the creation, establishment and management of investment funds.
A cryptocurrency investment fund consists of two legal entities:
1. Fund manager - OÜ
A fund manager is a company whose main and permanent activity is the management of one or more funds. The fund manager can manage a fund created or established in accordance with the Investment Funds Act. To work as a fund manager, a person must be licensed to operate and register their activities with the Money Laundering Data Unit (FIU) in accordance with the provisions of Part 5 of the Investment Funds Act.
2.Limited Partnership Fund (LPF)
The participants of the Limited Partnership Fund are at least one full member (General Partner), who is the Fund Manager, and at least one investor (Limited Partner).
When the fund is initially set up, there is no need to register an investor (limited partner).
A fund of a limited liability partnership is a fund established as a limited liability partnership in accordance with the Investment Funds Act, and the provisions of the Commercial Code of the Republic of Estonia apply to its establishment, operation and liquidation.
The Limited Partnership Fund may manage its assets or enter into a Management Agreement with the Fund Manager. Only a Fund Manager licensed to operate under the Investment Funds Act can act as a limited liability manager of a limited liability fund or as a general partner of a limited liability fund that manages its own assets.
3. Possibilities of an alternative investment fund
An alternative investment fund (AIF) is the most convenient structure for collective investment, in which investors' assets are attracted for the purpose of their further use and placement in their interests in accordance with a predetermined investment policy under the leadership of the company that managed the fund. You can invest in a fund in cryptocurrency.
An alternative investment fund is the best solution for collective venture capital investments and organizing investor funds in stocks, bonds, commodity indices, derivatives, currencies, cryptocurrencies, real estate and other financial assets.
The prices of different asset classes often move in different directions, with the result that investments in different types of assets can stabilize the overall investment.
In addition, the fund can invest in public companies and private equity companies and portfolios, as well as in listed companies. Investments can be made all over the world without adhering to a certain principle of global distribution. Derivatives can be used to meet investment objectives or mitigate risks.
A fund manager usually invests in short-term bonds issued by governments or companies to generate risk-free returns. To generate higher returns, the Fund Manager usually takes positions in derivatives (mainly in the form of futures and forward contracts) on indices or individual instruments in the stock, bond, foreign exchange and commodity markets. Futures and forward positions can be “long” (that is, making money in a rising market and losing in a falling market) or “short” (making money in a falling market and losing in a rising market).
The cost of investing in a fund can sometimes be negative: fund investors take on the risk that as a result of the investment they may receive a smaller amount than was originally invested.
Before making an investment decision, investors should take into account that neither the return for previous periods, nor the history of the fund / management company up to the present moment guarantee profit and do not serve as an indicator of the profitability in subsequent periods.
For the founders of the fund:
The total investment in the fund can be up to 100 million euros.
The term for creating an investment fund is from 2 months.
There is no minimum investment threshold.
The ability to invest in cryptocurrency.
The cost of creating a cryptocurrency fund
At the initial stage, the specialists of Diamont Law OÜ recommend drawing up a Legal Opinion for your project, analyzing the business model for compliance of your project with the structure of the Alternative Investment Fund.
Term for the creation of the Cryptocurrency Fund - from 2 months.
Creation of a cryptocurrency fund 50 000 euro
Diamont Law OÜ team of experts will be happy to accompany your project in the necessary procedures for preparing documents and obtaining a license for an alternative investment fund in Estonia.