The Limited Qualified Investor Fund

Origins and legislative history

For many years the Swiss asset management industry argued that Swiss law lacked a vehicle that could compete with the Luxembourg reserved alternative investment fund (RAIF), introduced in 2016.¹ The RAIF needs no approval from the Luxembourg supervisor because the supervision rests on its authorised manager. Swiss managers who wanted to offer a private equity or real estate fund to Swiss pension funds could either go through the FINMA approval procedure or set up the fund in Luxembourg. They often chose the second option. The Federal Council took up the idea of a Swiss equivalent, and Parliament adopted the necessary amendment to the Collective Investment Schemes Act in its final vote of 17 December 2021, after the Council of States had approved the first draft unanimously on 9 June 2021.² After a longer than expected preparation of the implementing ordinance, the new provisions entered into force on 1 March 2024.

The industry association welcomed the reform while noting its limits. AMAS stated that the final version did not fully achieve the original objective of liberalising the structure, because it was not as competitive as the Luxembourg model that the association had advocated.³ The main criticism concerned the restrictions that the ordinance imposed on real estate investments and the requirement that the fund be administered by specific categories of supervised institutions.

The legal design

The L-QIF is not a new legal form. It is a regulatory status that may be attached to a contractual fund, a SICAV or a limited partnership for collective investment, while the SICAF is excluded. Part E of this book has already described the vehicle in connection with insurance-linked securities, so a summary of the features relevant to Zurich managers is sufficient here.⁴ An L-QIF needs no authorisation or approval from FINMA and is not directly supervised. Its administration lies with an institution that FINMA does supervise. For a contractual fund this is the fund management company. A SICAV with L-QIF status must delegate both administration and investment decisions to a licensed fund management company. The limited partnership must delegate its management to a manager of collective assets, unless its general partner is itself a bank, insurer, securities firm or fund management company. Portfolio management may be further delegated to a manager of collective assets or to an institution under stricter supervision. A simple portfolio manager under the lighter regime of FinIA may not act as delegate.

The L-QIF is open only to qualified investors. Contractual and SICAV structures may borrow up to 50 per cent of net assets, pledge up to 100 per cent and assume total commitments up to 600 per cent. They must reach net assets of CHF 5 million within one year of launch. Real estate L-QIFs are subject to additional rules, including an independent valuation. According to Lenz & Staehelin, high-net-worth individuals who are qualified investors only by virtue of an opting-out may not invest in L-QIFs that hold real estate directly.⁵ The front page of the fund documents and all advertising must designate the fund as a “Limited Qualified Investor Fund” or “L-QIF” and make its exemption from FINMA authorisation, approval and supervision clear to investors.⁶

The absence of FINMA supervision is compensated by transparency towards the federal administration. The institution that administers an L-QIF must notify the Federal Department of Finance of its launch, of any change to the notified information and of its dissolution. The State Secretariat for International Finance (SIF) publishes a register of notified L-QIFs, which it last updated on 2 September 2026. Late or incomplete notifications may have criminal consequences, and the L-QIF remains subject to a supplementary audit.⁷ The register thus replaces the FINMA list of approved funds as the public source of information on these vehicles.

The first years in practice

The L-QIF started slowly. A review by an audit firm counted fourteen L-QIFs notified to the Federal Department of Finance by 5 December 2024, ten months after the entry into force. Ten of them were contractual funds, two were SICAVs and two were limited partnerships. The authors saw demand mainly for funds with few investors and for very specific or mixed investments that could not be structured optimally through approved vehicles.⁸ Practitioner commentary of 2026 continues to describe the uptake as moderate and notes that the L-QIF remains relatively new, with fewer vehicles than comparable structures in Luxembourg and Ireland.⁹

Several factors explain the gap between expectation and reality. The first is the withholding tax, which applies to the L-QIF as to any Swiss fund and deters foreign investors. The second is the lack of a European passport, which prevents the L-QIF from being marketed to European professional investors other than through national private placement regimes. The third is habit. Swiss pension funds and their consultants have long been used to Luxembourg structures and to Swiss investment foundations, which serve the same domestic institutional clientele. The L-QIF is therefore likely to remain a domestic product for Swiss institutional and private clients, used especially for single-investor funds, club deals, real estate and private markets. Within that niche it offers Zurich managers a faster and cheaper Swiss alternative to a Luxembourg vehicle.

Notes

1. Dechert LLP, “The Luxembourg Reserved Alternative Investment Fund – A change-maker for AIFs”, AIMA Journal, edition 108 (14 October 2016), on the law of 23 July 2016, in force from 1 August 2016, under which the RAIF is not authorised by the Commission de Surveillance du Secteur Financier and must always be managed by an authorised external alternative investment fund manager, https://www.aima.org/journal/aima-journal-edition-108/article/the-luxembourg-reserved-alternative-investment-fund-a-change-maker-for-aifs.html. ↩
2. EY Switzerland, “The L-QIF – the new Swiss fund for qualified investors”, on the unanimous approval of the draft by the Council of States on 9 June 2021, the final vote of 17 December 2021, the exemption of the L-QIF from FINMA authorisation, the permitted legal forms and the hope that the vehicle would reduce the incentive for Swiss investors to use foreign vehicles, https://www.ey.com/en_ch/insights/wealth-asset-management/the-lqif-the-new-swiss-fund-for-qualified-investors. ↩
3. Asset Management Association Switzerland (AMAS), “Limited Qualified Investor Fund L-QIF”, on the entry into force on 1 March 2024, the association’s support for the reform, its view that the final version did not fully achieve the objective of liberalisation compared with the Luxembourg RAIF, and the description of the L-QIF as a flexible Swiss-law scheme not subject to FINMA authorisation, https://www.am-switzerland.ch/en/topics/regulation/limited-qualified-investor-fund-l-qif. ↩
4. KPMG Switzerland, “Limited Qualified Investor Fund (L-QIF) factsheet”, on the three permitted legal forms, the exclusion of the SICAF, the management requirements for each form, the prohibition on management by simple portfolio managers, the permitted investors, the borrowing and commitment limits, the minimum net assets of CHF 5 million within one year, the tax transparency of the vehicle and its exemption from stamp duty on issuance, https://assets.kpmg.com/content/dam/kpmg/ch/pdf/limited-qualified-investor-fund-factsheet.pdf. ↩
5. Lenz & Staehelin, “Investment Funds 2026 – Switzerland: Trends and Developments”, Chambers Global Practice Guides, on the application of the L-QIF status to contractual funds, SICAVs and limited partnerships, the exclusion of high-net-worth individuals from direct real estate L-QIFs and the moderate initial market adoption, https://practiceguides.chambers.com/practice-guides/investment-funds-2026/switzerland/trends-and-developments. ↩
6. FINMA, news item on the Limited Qualified Investor Fund (February 2024), stating that the fund must be designated on the front page of the fund documents and in advertising as a Limited Qualified Investor Fund or L-QIF and that its exemption from authorisation, approval and supervision by FINMA must be made clear to investors, https://www.finma.ch/en/news/2024/02/23240223-meldung-l-qif/. ↩
7. State Secretariat for International Finance (SIF), “Limited Qualified Investor Funds (L-QIF)”, on the legal basis in Article 118f CISA and Article 126g CISO, the duty of the administering institution to notify the Federal Department of Finance, the public register of notified L-QIFs updated on 2 September 2026, the forms for notification and the possible criminal consequences of late or incomplete notifications, https://www.sif.admin.ch/de/limited-qualified-investor-funds-lqif. ↩
8. SWA Swiss Auditors AG, “L-QIF: Ein Rückblick auf die ersten zehn Monate” (January 2025), on the fourteen L-QIFs registered by 5 December 2024, their distribution among ten contractual funds, two SICAVs and two limited partnerships, and the typical use cases, https://swa-audit.ch/l-qif-rueckblick/. ↩
9. Dominik Oberholzer (Kellerhals Carrard), “Switzerland: An Investment Funds Overview”, Chambers and Partners, describing the L-QIF as attractive but relatively new, with fewer vehicles than Luxembourg and Ireland, https://chambers.com/content/item/6915. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.