How to create investment fund?

Entrepreneur, financier or investor, you must have surely heard of investment funds. This article provides some clarification on this financial instrument. How to create an investment fund and what are the main types? How does it work and who are the players in investment funds? Here’s what to remember about investment funds.

Definition: What is an investment fund and how does it work?

An investment fund is a company that invests capital in business projects. It is also called mutual fund. This financial company is created by financial organizations, banks or individuals. It can be private or public and therefore can bring together several types of investors: individuals, business partners or professional investors.

The funds deposited by these investors are used to provide support to companies for a limited period ranging from 3 years to more than 7 years. They intervene on many occasions such as:

An investment fund is managed by a fund manager. It is generally a professional in finance and economics who leverages his expertise to select companies according to project, objectives, duration, risk and return. This fund manager receives up to 2.5% of the fund’s total amount to cover operating costs (salaries, premises, etc.), which are called management fees. He also gets about 20% of the fund’s profits at the close, this is called the carried interest. The rest goes to the investors.

nice to know

An investment fund lasts for about 8 to 12 years.

What are the Different Types of Investment Funds?

Investment funds exist in different forms depending on how they operate or the area in which they operate. Here are the main types of investment funds.


FCC There are mutual funds. They allow even the smallest investors (more or less significant) to make deposits for investments not listed on the stock exchange. There are several types of FCP:

  • FCPE for Employee Savings, Company Mutual Funds;
  • FCPR, Mutual Risk Investment Fund, up to a minimum of 50% for unlisted securities;
  • Mutual Investment Fund in Innovation, FCPI, for innovative projects with unlisted securities up to a minimum of 70%.


A SICAV, Société d’Investissement A Capital Variable, is a type of investment fund in the real estate sector. It is the most common form of UCITS (Undertaking for Collective Investment in Transferable Securities). By injecting money from SICAV, investors become shareholders of SICAV and hold a part of the fund. But the types of funds within SICAV are diverse. These can be Treasury bills, stocks, bonds or diversified securities.


Professional Capital Investment Fund (FPCI), also called capital investment, deals with investments up to a minimum of 50% in unlisted companies. These investments are made by professionals and should generally amount to at least €100,000.

real estate investment fund

Real estate investment funds offer diversified investments with high returns. We specifically differentiate SCPI (Société Civile de Placement Immobilier), which buys real estate for professionals, such as offices, shops, parking lots, etc. They would be rented out, thus creating regular returns, and possibly sold with a plus-value. ,

Another real estate investment fund, OPCI (Organisme de Placement Collectif Immobilier), is similar to SCPI, but with the possibility of more easily recoverable cash.

There are many other types of investment funds that differ in operations and purpose. These include alternative investment funds (AIFs), listed index funds (FICs) or local investment funds.

Benefits of an investment fund

First, an investment fund allows investors, especially newbies or inexperienced ones, to be able to make a diversified investment of their financial assets. Thus they have access to different types of investments, different fields of activity, different locations (especially abroad) or even difficult markets.

By choosing an investment fund, you also benefit from the expertise of the fund manager who is able to optimize investments and thus maximize earnings.

Finally, in the context of management, an investment fund brings other benefits such as ease of transfer of investments (to other media of the same family with similar fee structure), programming or systematic withdrawal of investments, sale to obtain liquidity or purchase transaction. or the flexibility of managing the benefits received.

Who can create an investment fund?

An investment fund can be created by banks, financial organizations or individuals. The main obligation is to obtain AMF approval.

Setting up an investment fund is not a more complicated process than setting up any other business. But, as always, due diligence while completing various formalities will save you from making errors and wasting time. There are three main steps one should follow to create an investment fund.

AMF approval

First you need to contact the Autorité des Marchés Financiers (AMF) to submit your project. This step is not mandatory but strongly recommended. This makes it possible to raise any difficulties in advance and thus optimize the filing of the file for obtaining approval.


Once your project is validated, you can fill out the “Approval Process for Portfolio Management Companies, Information Obligations and Passports” file.

This approval file contains various documents, including an application submission form, approval request, various information on the manager(s), investment funds, etc. You will receive a deposit receipt once the file is complete. Sent. This is first examined by AMF departments, which may then request additional information, which is then presented to the AMF Board.

You are then notified by the AMF that the authorization has been obtained.

In some cases, depending on the quantum of assets or the nature of the investors, an application for approval from the AMF is not necessary to create an investment fund. You can contact AMF to learn more about its obligations depending on your project.

company building

To be able to carry out your activity, you must form a company and define the most appropriate legal status for it. The legal form affects the operation of your investment fund. Hence it is an important step which should be considered and done with full knowledge of facts. You will also need to draft the legal articles of association for your new company. Don’t hesitate to come up with a legaltech for this step.

Statement of Objective of Investment Fund

When setting up an investment fund, you should also define and declare the investment objectives of the fund. The purpose of the investment fund is published using the form provided by the AMF (Appendix I-3 of the AMF Directive – DOC 2012 – 06). This makes it possible to specifically determine the category to which the investment fund belongs and finalize the fund creation process.

questions to ask

Why is it interesting to create an investment fund?

An investment fund makes it possible to acquire the wealth of multiple investors for diversified investments, which are difficult to access, more profitable, etc., thanks to the expertise of an expert manager.

What is AMF Approval?

AMF approval is an authorization issued by this institution after scrutiny of the application file. This allows its holder to operate on the financial markets and guarantees the conformity of the financial products sold to investors.

Who Are the Investors in Financing Funds?

They can be company partners who will benefit from money, professional investors or individuals.

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