QIFs in the Czech Republic – then and now

Qualified investor funds are intended exclusively for experienced private and institutional investors.  A definition of a qualified investor can be found in Section 272 of Act No 240/2013 on investment companies and investment funds(the Investment Companies and Investment Funds Act,shortly „ZISIF“). 

Put simply, a qualified investor is a Czech or foreign individual or legal entity who invests:

  • at least EUR 125,000 (or the equivalent in CZK) and confirms that they are aware of the risks associated with investing in the fund; or
  • at least CZK 1 million, if the fund administrator confirms that the investment is a match for the investor’s financial background, investment objectives, expertise and experience. In this case, potential investors need to take an “investment test”.
Another important entity is the institutional investor. This may be a bank, securities dealer, insurance company, pension fund, or similar institution pooling money to buy securities, real estate and other investment assets or to provide loans.

Alternative funds and their activities have gradually been evolving in the Czech Republic since 2006.

The origins of qualified investor funds in the Czech Republic can be traced back to an amendment to the Collective Investment Act, which entered into force on 26 May 2006. This placed an investment instrument for “qualified investors” among the special funds that, until then, had been intended only for collective investment by the public.

QIFs differ from retail funds (i.e. funds for investors from the ranks of the general public), among other things, in their

  • lower level of regulation
  • looser rules for setting investment policy
  • looser Investment limits

The first QIF in the Czech Republic

The first qualified investor fund in the Czech Republic was the open-end mutual fund AMISTA Garancia, AMISTA investiční společnost, a.s., which was formed on the basis of a CNB permit issued on 16 January 2007.
In 2013 entered into force The Alternative Investment Fund Managers Directive (AIFMD) and this is a unifying piece of European regulation that has a significant influence on how investment rules are set.

Where now?