Funds covering the whole investment universe

Funds covering the whole investment universe

Luxembourg has not only created fund products targeted to the specific needs of all types of investors, but also a legal and business infrastructure which is able to support almost any investment strategy. While UCITS are, by definition, restricted in terms of asset eligibility to transferable securities, funds, derivatives, cash andother funds, be they Part II funds or SIFs, have an extremely broad (indeed, almost unlimited) scope of eligible assets.

Next to the “traditional alternative” funds that are the Real Estate, Private Equity and Hedge funds, we also observe more specialist mandates like art, infrastructure, containers, wine, woods and agriculture, pollution rights and many others. There is no limitation in terms of asset class and no limitation in terms of geography – the only limit being the possibility to value the investment and to have it safeguarded by a Luxembourg depositary.

Private Equity and venture capital funds

Specific to this asset class, Luxembourg has introduced legislation designed to meet the needs of the Private Equity and venture capital community. This law of 15 June 2004 relating to an investment company in risk capital (“SICAR”) creates a very favourable regulatory and tax regime for vehicles which technically are not investment funds, but resemble their functioning closely. The SICARs, which are also exclusively reserved for well-informed investors, are, next to the SIFs, the prime vehicles for investing into Private Equity and venture capital.