6 Months of CISA – A First Assessment

Contrary to the fears of some, life (and fundraising) continues in Switzerland six months after the new rules governing fundraising (CISA) entered into force.

CISA entered into force on March 1 2015 after a two year transition period. The latest revision brings the alternative fundraising process (private placement) of alternative funds under the regulatory umbrella.

Based on conversations with industry participants, we (very roughly) estimate that 1,500 – 2,500 alternative (qualified investor) funds subjected themselves to “full” compliance with CISA, i.e. they appointed a Swiss representative and paying agent.

The appointment process is now well understood by market participants and can be executed within a 2-3 week timeframe. Economically, the exercise pays off for the manager as long as at least $1m is raised from Swiss investors.

The large, global managers showed the way in the second quarter of 2015. Since then, many small and mid size managers have followed suite. Unsurprisingly, Europe based managers were first to comply, followed by US and then Asian managers.

What about Swiss investors?

We have also attempted to ascertain the impact on the much discussed “unregulated qualified investor” category. This category encompasses primarily family offices and pension funds, two pillars of Swiss alternative allocation.

According to the family offices we polled, it seems that the majority of managers continues to market in Switzerland so far. Beyond those who have appointed a Swiss representative and paying agent, there are still numerous firms who continue marketing through reverse solicitation or by concentrating their efforts solely on the regulated financial intermediaries (typically banks and insurance companies).

We are planning a more extensive survey of market participants in due course. Please reach out to us if you would like to participate or receive the results.