CHILE Law and Practice Contributed by: Felipe Díaz Toro, Victor Riadi and Ignacio Ruiz Rodríguez, EDN Abogados
1. Market Overview 1.1 State of the Market
jobs annually. According to a study published by the CLAPES UC Latin-American Center for Economic and Social Policy, this amounts to a total of between 87,000 and 100,000 new jobs over the course of eight years. In addition, the report states that the sustained increase in AuM held by all public investment funds contributed, on average, USD14,442 per year to the GDP per capita between 2014 and 2022. 2. Alternative Investment Funds 2.1 Fund Formation 2.1.1 Fund Structures Chilean investment fund legislation does not provide for specific structures for funds invest - ing in alternative assets. In Chile, the distinction between FFMM and investment funds does not consider whether the types of assets in which these funds invest are traditional, alternative or a combination of the two. The investment strategy employed by the fund’s manager is also not relevant in this regard. Consequently, investment in alternative assets in Chile may be structured through any of the legal structures permitted by law. As mentioned in 1.1 State of the Market , invest- ment funds are governed by the LUF, which a decade ago provided a systematised, coherent and unified regulatory framework for the vari - ous types of investment funds permitted within the jurisdiction. The LUF is complemented by its rules, contained in Decree No 129. Signifi - cant attention must also be given to the role per - formed by the Chilean Financial Market Com - mission ( Comisión para el Mercado Financiero CMF), in terms of its legal mandate to issue reg - ulations for the application and enforcement of laws and regulations and, in general, to issue any
Chile’s investment fund market has continued its slow-paced recovery towards growth over the past year. The National Association of Mutual Funds reported that assets under management (AuM) held by mutual funds (FFMM) reached approxi - mately USD62 billion by June 2023. After the 2022 decline in growth of 9%, the 2023 mid-year growth of 14% indicated a substantial recovery of all the AuM lost in 2022. Although these pro - cesses often respond to multiple variables, there is a general consensus that the main cause of said loss was due to the political uncertainty brought about by the constitutional initiatives regarding possible modifications of property rights and pension funds. In 2023, most of the newly incorporated funds focused on real estate, infrastructure develop - ment and private debt. According to the 2023 Industry Report from the Chilean Association of Investment Funds (ACAFI), 68% of the 82 new investment funds invested in local assets and projects. The report also indicated a marked prevalence of alternative investment funds (605) over traditional investment funds focusing on purely financial assets (157). The development of the investment fund indus - try has had a positive and significant impact on both GDP per capita and job creation since the enactment of Law No 20,712, published on 7 January 2014, on funds and portfolio manage - ment ( Ley Única de Fondos – Ley sobre Admin - istración de Fondos de Terceros y Carteras Individuales , or the Funds and Portfolio Manage - ment Law (LUF)). From 2014 to 2022, this posi - tive impact led directly to the creation of 11,000
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