Investment Agreement

What is an Investment Agreement?

An investment agreement is a key component of the "mandatory toolkit" for any alternative investment fund. It is a contract with the client that includes, among other things, the investment strategy or an extract thereof. Typically, it is a template document that is presented to prospective investors in your fund and subsequently entered into with the investor/client.

What does the Investment Agreement include?

In addition to standard contractual provisions (such as subject of the agreement, duration of the relationship, means of communication, etc.), the investment agreement must clearly define the investment the client is contributing to the fund. The agreement also sets out how the investment will be managed, often by referencing the fund’s investment strategy. A crucial part is the method for returning the investment. The agreement also governs the distribution of profits from the fund’s activities, or at least defines how the return is calculated.

We also recommend including a statement that the fund’s activity is not subject to supervision by the Czech National Bank, and additional provisions related to AML/CFT obligations, etc.

We’ll be happy to help you prepare a high-quality investment agreement for your alternative investment fund or assist you in upgrading your existing one.

Where to next?

• What is an alternative investment fund?
• Obligations of the fund manager
• Turnkey establishment of an alternative fund
• CNB reporting
• AML obligations
• Preparation of the KID under the PRIIPs Regulation
• Investment strategy
• News