Does the owner of ASI have to be ZASI?

According to the legal definition of ASI contained in Article 8a section 1 of the Act on Investment Funds and Management of Alternative Investment Funds (the “Funds Act”), the alternative investment company is a type of alternative investment fund other than a specialised open-end fund or a closed-end investment fund. Subject to the exceptions set out in the Act, the sole object of the alternative investment company is to collect assets of a number of investors and invest them for these investors in accordance with the applicable investment policy.

ASI is managed by the so-called ASI manager, also defined in the Funds Act (“ZASI”). Pursuant to Article 8b section 1 of the Funds Act, ZASI manages an alternative investment company, including at least its investment portfolio and risk.

Under the Funds Act, only a limited liability/joint-stock company which is an alternative investment company and acts as an internal manager of ASI or a limited liability/joint-stock company which is a general partner of an alternative investment company and acts as an external manager of ASI can have ZASI status.

If a given investment structure is in line with the ASI framework, the ASI manager is obliged to conduct their activities in accordance with the Funds Act and based on the authorisation of the Polish Financial Supervision Authority (KNF) or entry in the register of ASI managers.

In this respect, the question that arises is whether the owner of ASI acting as a commercial law company has to be ZASI, i.e. meet all the requirements for ZASI.

The answer to this question is given in Article 1a section 2 item 8 of the Funds Act stating that the activities of holding companies do not constitute alternative investment fund management activities.

For the purposes of the Funds Act, the definition of a holding company, is given in Article 2 item 10d stating that a holding company shall mean a limited liability/joint-stock company, including a European company, which pursues a specific industry business strategy through companies in which it holds shares or through subsidiaries or affiliates, within the meaning of the Accounting Act, to generate long-term growth of the value of these companies, subsidiaries or affiliates, and which:

  1. carries out this activity in its own name and on its own account with its shares admitted to trading on a regulated market, or
  2. was not established primarily for the purpose of earning income for investors by selling shares in such companies (provided that this is recognised in its annual financial statements).

The essence of the holding is that a single parent company manages and controls the activities of multiple subsidiaries through capital or personal relationships.

Therefore, the answer to the question is no – the owner of ASI acting as a commercial law company does not have to be ZASI if it is a holding company as defined above.

If the activities of a holding company are based on the day-to-day management of its own assets and thus it decides on how its own assets are allocated, the exemption from the Act referred to above is fully justified.

However, if a given entity uses the exemption indicated in Article 2 item 10d of the Funds Act, i.e. meets the requirements contained in the definition of a holding company, its activity is not based mainly on obtaining income for investors and it recognises this fact in its annual financial statements, it will not have to meet the requirements for ZASI.

Most importantly, the company is not obliged to conduct a registration or obtain the KNF authorisation in this case.

As a side note, conducting the investment activities without obtaining the required authorisation or contrary to the conditions set out in the regulations is subject to a fine of up to PLN 10 million and imprisonment for the period of up to 5 years.

Therefore, due to the possible far-reaching consequences, the entities which intend to carry out, inter alia, investment activities should verify their object to ensure that their intended activities do not have to comply with the relevant requirements, including registration and KNF authorisation requirements.


Jarosław Rudy, Legal Adviser

Roksana Dworak, Lawyer