Luxembourg: Fund Management/ REITs

For much of the past decade, strong fundraising, rising asset values and readily available liquidity helped contain tensions that might otherwise have developed into disputes.

Two years on from the entry into force of Directive (EU) 2024/927, commonly referred to as AIFMD II, the 16 April 2026 transposition deadline has passed, and the state of play across the EU is best described as uneven, with compliance posture increasingly dependent on where an AIFM is authorised. However, Luxembourg, which hosts the largest shares of EU AIFs within the Union, transposed the Directive without material gold-plating.

Private equity funds increasingly face investor demand for EUR-denominated commitments, creating complex currency risk management challenges. This analysis explores three structural approaches to accommodate EUR investors while balancing foreign exchange exposure, operational costs, and fund firepower considerations.

European institutional investors increasingly favor Article 8 funds under SFDR, which promote environmental and social characteristics alongside good governance practices. US fund managers face strategic decisions when entering the EU market, weighing the benefits of Article 8 classification against operational constraints and investor preferences. The regulatory landscape offers flexibility in ESG implementation, though upcoming SFDR 2.0 reforms will reshape these disclosure requirements by late 2027.

Semi-liquid alternative investment funds face a critical challenge: balancing illiquid asset investments with investor liquidity needs. When redemption requests surge beyond certain thresholds, fund managers can deploy various restriction mechanisms—but understanding the nuanced differences between redemption caps, gates, and their variants becomes essential under the new AIFMD II framework. The choice between hard caps, soft caps, and gates carries significant implications for regulatory compliance,

Luxembourg's partnership limited by shares (SCA) offers private fund managers a compelling corporate alternative to the special limited partnership structure, particularly for EU family offices and high-net-worth individuals. When combined with the RAIF regime, this vehicle achieves tax neutrality while maintaining the corporate governance framework that certain investors prefer. The SCA-RAIF structure addresses key legal and tax considerations while providing flexibility for secondary strategies, fund-of-f

The Luxembourg financial regulator (CSSF) has issued guidance for open-ended Luxembourg regulated fund products, excluding ELTIFs. Below, we focus on what matters most for US fund managers (USFM).

If an EU alternative investment fund manager (EU AIFM) classifies a fund under management as open-ended, it triggers the need to implement a robust liquidity management framework.

In January 2022, we published a client alert examining the initial FAQ issued by Luxembourg’s financial sector regulator—the Commission de Surveillance du Secteur Financier—on the use of what it then called “virtual assets” by investment funds and credit institutions.