SWITZERLAND Law and Practice Contributed by: Jürg Frick, Luca Dal Molin, Philippe Gobet and Carla Bertossa, Homburger
new act and, if enacted, will be required to comply with new duties, including entering information on their beneficial owners in a new federal register. It is anticipated that the parliamentary debate will reach its conclusion during the autumn session of 2025. How - ever, it is not yet clear when the draft legislation will be enacted. 4. Investors 4.1 Types of Investors in Alternative Funds Investor appetite for AIFs in Switzerland is strong, par - ticularly in segments like private equity, hedge funds, real estate, and infrastructure. Swiss investors have historically valued stability and long-term growth, and many view alternative investments as a way to diversify their portfolios, hedge against inflation, and seek higher returns, especially in a low interest rate environment. There is increasing interest in ESG and sustainable investment strategies as well. Common types of investors for funds in Switzerland are: • Institutional investors: Swiss pension funds, insur - ance companies, and family offices are among the largest investors in AIFs. • HNWIs: Switzerland has a large number of wealthy individuals who actively invest in alternative assets. They are often more flexible and willing to explore niche strategies such as hedge funds or venture capital funds. • Private banks: Given Switzerland’s prominent pri - vate banking sector, many funds are marketed to ultra high net worth clients (UHNWIs) and institu - tions through private banks, which act as interme - diaries. Challenging types of investors for funds in Switzerland are: • Retail investors: Swiss regulations, particularly under the FinSA and CISA, make it more challeng - ing for retail investors to access AIFs, as many such products are reserved for qualified or institu - tional investors.
• Conservative institutional investors: Some Swiss pension funds and traditional institutions have strict risk management policies and a preference for low-risk investments, making them less inclined toward more speculative or highly leveraged AIFs, like certain hedge funds or venture capital. 4.2 Side Letters While side letters are not expressly prohibited under Swiss law, their use raises delicate considerations, particularly in light of the rules of conduct, in particu - lar the duty of loyalty and the principle of equality of treatment that applies to investors in Swiss AIFs. If certain investors receive benefits like lower fees with - out a solid rationale, this could be seen as a breach of the rules of conduct. Such violations could trigger civil liability or administrative sanctions. Therefore, side letters require careful handling to ensure compli - ance with Swiss law. 4.3 Marketing of Alternative Funds to Investors Investors of AIFs AIFs can generally be marketed to all investors, both Swiss and foreign. Investors of AIFs may be natural or legal persons, as well as general and limited part - nerships. The CISA distinguishes between qualified and retail (non-qualified) investors, while the following investors are deemed to be qualified investors: • supervised financial intermediaries, which com - prise banks, securities firms, fund management companies, managers of collective assets and col - lective investment schemes (including AIFs); • supervised insurance companies; • foreign financial intermediaries or insurance com - panies subject to prudential supervision; • central banks; • public bodies and occupational pension funds or other occupational pension institutions with profes - sional treasury management; • national and supranational public entities with pro - fessional treasury management; • companies with professional treasury manage - ment; • large companies; • private investment structures with professional treasury management set up for HNWIs; and
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