To what extent is the new LP structure in Luxembourg attracting new Fund managers?
The AIFMD regime has been in place for more than 12 months and 2015 has seen strong demand by managers of compliant structures especially those working with real estate. This growth has contributed to Luxembourg breaking the 3.5TN Euro level of AUM domiciled in the Grand Duchy (Q2 of 2015 : CSSF). Some Private Equity fund managers, especially those familiar with operating in unregulated offshore regimes, have continued to question if the time, energy and additional costs of becoming compliant vis-à-vis the AIFMD regime are worth the benefit of reaching European investors.
The implementation of the AIFMD was accompanied by the updating of Luxembourg Corporate law by means of a new partnership form without legal personality known as an SCSp or Special Limited Partnership (SLP). This structure has a number of benefits but a key point of interest for managers is the way in which an investment vehicle can operate as “unregulated” and yet still be AIFMD compliant and thus benefit from the passport, expediting distribution within the EU.
'Source: The Point. Nov 2015'