Your Personal Fund
A so-called "Spezialfonds" is a specialized investment fund tailored for institutional investors, foundations and high-net-worth individuals. In Austria, these funds offer the most flexible and tax efficient way to manage substantial investments. Together with our partners, froots offers both the setup and management at multiple custodian banks, starting from 10 million EUR.
Advantages of a Spezialfonds
Efficient Tax Management
Spezialfonds can offer significant tax advantages, such as the deferral of taxes on capital gains and income. These tax benefits can enhance your overall investment returns, making your portfolio more efficient.
Tailored Solutions
A Spezialfonds allows you to design an investment strategy that perfectly aligns with your existing holdings, objectives, risk tolerance, and time horizon. You have the freedom to choose from a wide range of asset classes, including equities, bonds, real estate, and alternative investments, ensuring a diverse asset allocation.
Transparancy & Control
You receive detailed reports on the fund’s performance, holdings, and transactions, providing full transparency. While benefiting from professional management, you retain control over key investment decisions, ensuring that your investments are always in line with your objectives.
Cost Efficiency
Scale and efficiency lower the management fee to 0,5%, which is only charged over the part of the fund that froots is managing. With average custodian costs of 0,14%, this results in an even more efficient setup than other HNWIs, family offices and foundations receive at froots.
Your Spezialfonds in Just a Few Steps
1. Initial Consultation
Our team conducts a thorough assessment of your investment objectives, risk appetite and existing assets. Based on this input, we will outline a customized investment strategy together.
2. Fund Setup
We will select a suitable custodian and set up the fund together with the partner that you select, handle all legal and regulatory requirements to establish your Spezialfonds and guarantee that everything is in compliance with Austrian laws.
3. Investment Implementation
Based on your strategy, we allocate assets across selected investment categories, execute the initial investment transactions, and start managing your fund.
4. Ongoing Management and Reporting
Continuous monitoring and adjustments are made to optimize the funds' performance. You will always be able to see the latest status, transactions and performance, and you receive periodic reports and updates on your fund.
Multiple Tax Advantages
Spezialfonds have multiple tax advantages compared to normal investment accounts, making the construct a no-brainer for bigger and more complex fortunes in Austria.
No VAT on Fees
In a Spezialfonds, administrative and custody fees are exempt from VAT. This exemption reduces the overall costs associated with managing your portfolio, allowing more of your funds to be invested rather than spent on fees.
Offsetting Costs
All administrative expenses can be offset against the fund's income. This means that any costs incurred for the administration of the fund can be deducted from the fund's earnings, thereby lowering the taxable income and increasing the net returns for investors.
Loss Carryforward
Within the legal limits, Spezialfonds allow for annual loss offsets and loss carryforwards to subsequent periods. This exclusive feature enables the fund to use current losses to offset future gains, reducing the taxable amount in profitable years and providing a smoother return profile over time.
The specific tax treatment depends on your personal circumstances and may be subject to future changes. Securities service providers are not authorized to provide tax advice.
FAQs About Spezialfonds
What is a Spezialfonds?
A Spezialfonds is a specialized investment fund tailored for family offices, foundations and high-net-worth individuals, offering customized investment strategies, tax advantages, and professional management.
Who can invest in a Spezialfonds?
Spezialfonds are designed for institutional investors and high-net-worth individuals, with a minimum investment requirement of 10 million EUR.
What are the tax advantages of a Spezialfonds?
Key tax advantages include deferral of taxes on capital gains and income, exemption from VAT on administrative and custody fees, the ability to offset administrative expenses against the fund’s income, and the capability to carry forward losses to subsequent periods.
The specific tax treatment depends on your personal circumstances and may be subject to future changes. Securities service providers are not authorized to provide tax advice.
How is a Spezialfonds managed?
Our Investment Committee will instruct the jointly selected partner to manage the fund according to the previously defined strategy. We will draft our strategy together with you and continuously keep you in the loop, to ensure alignment on the fund’s objectives.
Can I customize the earnings distribution of my Spezialfonds?
Yes, you can decide whether your fund distributes earnings annually or reinvests them (thesauriert). Scheduled earnings distributions are popular among foundations and family offices.
What level of legal security does a Spezialfonds offer?
The Spezialfonds structure offers high legal security through investment fund law, external auditors, and oversight. Additionally, the assets will never be kept on the balance sheet of the custodian, meaning that in the unlikely case that something would happen to the bank, this would not have an impact on your fund.