Investment fund as part of planned succession

An investment fund – in addition to its main purpose of investing in selected financial instruments – can play an important role in the succession of an asset or business. If the owners of a particular asset or business want to use an investment fund as a succession vehicle, the first step is to establish a suitable fund.

The fund is created by an investment fund company, whose function is also to manage the fund. Subsequently, the owners of the property can, for example, contribute property or cash to the fund to take up investment certificates.

The main advantage for the testators is that the mutual fund company ensures professional management of the fund’s assets, thus preventing fragmentation. The participation of the company in the process also guarantees continuity in the management of the asset mass, efficiency (due to the professional nature of this entity), as well as security for certificate holders. This is because both the activities of the fund and the company are supervised by the Financial Supervision Commission.

At the same time, if the premise of the structure with the participation of the investment fund will be its long-term nature then the assets developed under intergenerational succession can be transferred to the next of kin who are participants in the fund.