All investment funds that are not covered by the European Directive, Undertakings for Collective in Transferable Securities (UCITS) are considered as Alternative Investment Funds. This includes hedge funds, funds of hedge funds, venture capital and private equity funds, and real estate funds, etc.
Alternative funds may invest in all types of assets but the investment policy must be approved by the financial sector regulator, the CSSF, who has established requirements regarding risk diversification.
Alternative funds can adopt several legal forms, same as a UCITS: a common investment fund (Fonds Commun de Placement – FCP), an investment company with variable capital (Société d’Investissement à Capital Variable – SICAV),or an investment company with variable capital (Société d’Investissement à Capital Fixe – SICAF).
In Luxembourg, an alternative Investment Funds can be separated into regulated forms (SICAR, SIF and securitisation Fund) and unregulated forms (SOPARFI, SPF and unregulated securitisation funds).
Securitisation undertakings are special purpose vehicles used to transform an asset and the associated returns and risk into a security. They are incorporated by a promoter to securitise any type of assets or risks linked with receivables or any activities realised by third parties. The process of securitisation is understood as acquiring risks from an originator by issuing a security the value of which and associated yields are linked to the underlying asset.
More information on Alternative investment Funds on:
Under EUR 1mio, a Special Limited Partnership (“SLP”) can be set up like a fund. It can invest in the legible assets and is not regulated.
More information on SLP on our Website: