LUXEMBOURG Law and Practice Contributed by: Evelyn Maher, Gaston Aguirre Draghi and Djelloul Mansour, BSP
2.2.2 Legal Structures Used by Fund Managers
ner, which is generally an entity controlled by the fund initiators and usually referred to as the general partner. The general partner has unlim - ited and joint and several liability for all the obli - gations of the fund. 2.1.4 Disclosure Requirements For a Part II UCI, SIF, RAIF or SICAR, a pro - spectus or offering document and an audited annual report must be made available to inves - tors. A PRIIPs KID must also be made available if the fund is to be marketed to retail investors. The Part II UCI must also prepare a semi-annual report. For an SLP, there are no specific disclosure requirements unless it has appointed a fully authorised AIFM, in which case it is obliged to also prepare audited annual accounts. Pursuant to the AIFMD, certain disclosures must be made to investors in the offering documents of those funds managed by an AIFM. In addition, regulated vehicles (SIF, SICAR and Part II UCI) are subject to periodic reporting to the CSSF for statistical and oversight purposes. Finally, any AIFs managed by an AIFM will be indirectly subject to the Annex IV reporting requirements, with reports to be submitted to the CSSF pursuant to the AIFMD. 2.2 Fund Investment 2.2.1 Types of Investors in Alternative Funds There has been an increased demand for access to AIFs in recent years. Investors are seeking more diversification than that offered by retail funds. Well-informed and institutional investors represent the majority of the investors in AIFs in Luxembourg, though there has been a trend towards retailisation of AIFs.
The legal structure used by alternative fund managers in Luxembourg will depend on the type and location of the investors, as well as the nature of the investment. SIFs, SICARs and RAIFs are intended for well-informed investors, and Part II UCIs are often used if there is an intention to target retail investors. Increasingly, unregulated RAIFs or SLPs (man - aged by an authorised AIFM) are used as they offer more certainty in terms of time to market. 2.2.3 Restrictions on Investors SIFs, SICARs and RAIFs are restricted to invest - ment by well-informed investors. The Part II UCI can be marketed to both professional and retail investors in Luxembourg. There are no restric - tions under Luxembourg law on who the limited partnership interests of an SLP can be sold to. However, for marketing in other jurisdictions, the AIFMD marketing passport will only allow mar - keting of the interests in an SLP to professional investors. Pursuant to the Law of 12 July 2013 on AIF managers (the “AIFM Law”), authorised AIFMs established in Luxembourg, in another EEA member state or in a third country are authorised to market AIFs they manage to retail investors in Luxembourg, provided certain conditions are met, as follows. • The AIFs must be subject in their home state to permanent supervision in order to ensure the protection of investors. • The AIFs must be subject in their home state to regulation providing investors with guaran - tees of protection at least equivalent to those provided by Luxembourg laws governing AIFs authorised to be marketed to retail investors
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