ALFI
INNOVATION KEY TO SUCCESS
L
uxembourg is widely regarded as a prime location for investment in private assets such as private equity, private debt, real estate and infrastructure. Much of its success in this field can be attributed to innovative investment vehicles which are success stories in themselves, and a perfect match for the dynamism of private assets investment. A real trump card in the Grand Duchy’s hand is its limited partnerships (LPs) that complement the broad range of legal solutions available for structuring alternative funds and private asset transactions. Among them, the Société en Commandite
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Spéciale (SCSp) stands out as a multipurpose solution for private assets. When Luxembourg introduced the SCSp in 2013, in a forward-looking move at the time of transposing AIFMD into national law, it provided the investment fund industry with a modern entity type that, to this day, scores with its wider scope and greater flexibility than options available in other jurisdictions. Unlike the ‘vanilla’ société en commandite simple (SCS), an SCSp has no legal personality and can exist merely by agreement between its partners, allowing the maximum flexibility in structuring with an efficient time-to-market, making it ideal
for various set-ups. Overall, the SCSp has proved a hit among those in search of a non-regulated, transparent vehicle solution. It is insightful to notice that over the past two years, the numbers of SCSp increased by 85 per cent, according to PwC’s analysis. MANAGEMENT PASSPORT
Another ace up Luxembourg’s sleeve is the the Reserved Alternative Investment Fund (RAIF). As a subset of AIF, it shares the manager-regulation regime’s key features without being directly subject to product approval by the regulator CSSF. Instead, it relies on an authorised external alternative
LUXEMBOURG REPORT | SEPTEMBER 2021
