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. RAIF and simple SLPs are not subject to the supervision of the CSSF.
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, Alternative Investments can be structured either in regulated formats like SICAR, SIF and securitisation Fund or as unregulated formats like SOPARFI, SPF, unregulated securitisation funds, Special Limited Parternships (SCSp) or RAIF.
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 Securitisation Undertakings on:
Under a threshold of EUR 100 mio, a Special Limited Partnership (“SLP” / SCSp) can be set up like a investment fund (AIF). It can invest into any types of assets and is unregulated. Its manager is not supervised by the CSSF as long it remains under such threshold.
More information on SLP on our Website: