Luxembourg is the largest fund domicile in Europe, and second only to the USA worldwide.
It is also Europe’s first jurisdiction for domiciling real estate funds distributed on a pan‑European basis.
With its stable political and business environment, Luxembourg is a centre of excellence in the fund industry. The legal framework offers a variety of vehicles to match the requirements of investors, asset managers and promoters.
Luxembourg gained international recognition as a jurisdiction for launching regulated private equity funds with the implementation of a dedicated private equity and venture capital investment vehicle, the investment company in risk capital (SICAR) and with the introduction of the specialized investment fund (SIF), a regulated, operationally flexible and fiscally efficient multipurpose investment vehicle for an institutional and qualified investor base. Both can be used for structuring private equity and venture capital investments.
Besides these two regulated Luxembourg fund vehicles, Luxembourg has built up its market share in private equity and venture capital funds thanks to its non‑regulated special purpose companies (such as the SOPARFI – financial participation company) which are used for private equity acquisitions and financings alike. A SOPARFI is typically used for holding and financing private equity and venture capital investments. It may thus equally serve as a special purpose vehicle, a joint venture vehicle or more rarely a private equity fund vehicle.
Luxembourg’s adoption of the AIFMD Law introduced a new legal form, the Special Limited Partnership (S. C. Sp., in French the Société en Commandite Spéciale or SLP) a limited partnership without legal personality. This legal form provides for a modernised legal framework for the organisation of the GP‑LP relationship. It is comparable to the common law limited partnership and can also be set up under a specific regulatory wrapper regime such as the SICAR or SIF regimes, or without. (Ref: Alfi).
According to the statistics published by Alfi the net assets under management in Luxembourg funds in January 2015 were Euro 3,277 billion a 24.89% increase in prior 12 months.
For further information about Luxembourg visit the following links:
Association of the Luxembourg Fund Industry
Commission de Surveillance du Secteur Financier
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