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Luxembourg Launches New Reserved Alternative Investment Fund

Written by: Editor

Luxembourg continues to consolidate its position as an international financial center through the launch of a new investment structure: the reserved alternative investment fund, shortly known as RAIF. The new legislation providing for the establishment of investment funds addresses international investors and asset managers seeking to offer their services in Luxembourg. Our lawyers in Luxembourg can offer more information on the new RAIF Law.

What is the new Luxembourg RAIF?

The new legislation providing for the reserved alternative investment fund was passed towards the end of the summer and enabled later in the autumn. The new type of fund comes to complete the toolbox available to foreign investors coming to Luxembourg. Even if the Grand Duchy already boasts a complex set of investment funds dedicated to all sort of investors, the new RAIF will be targeting foreign asset managers and investors.

The new Luxembourg RAIF will use the Alternative Fund Managers Directive implemented by the EU in order to offer a flexible type of fund which can be established in a swift manner without the approval of the Luxembourg Financial Regulator. However, the protection of the investors will be guaranteed through the fact that the fund must be administered by an AIFM. This way, the RAIF may also use the passporting rights granted by the same directive.

How can the new Luxembourg RAIF be established?

The RAIF follows the same pattern as the successful Specialized Investment Fund (SIF) and can be registered in just a few days. Moreover, the RAIF will have the same flexible structure and will be allowed to invest in various assets.

Considering Luxembourg is currently focusing on offering international financing services, the RAIF is expected to play an important role in the development of cross-border finance services over the next 5 years. The RAIF was also developed in order to offer a more attractive environment for foreign players seeking to invest in private equity and real estate, or to open hedge funds in Luxembourg.

For complete information on the new reserved alternative investment fund, please contact our law firm in Luxembourg. Our Luxembourg lawyers can also assist foreign investors who want to open investment funds in the Grand Duchy.