Investment Funds

Luxembourg is one of the largest investment fund centers in the world. The flexible product range is only one element which makes it so attractive for investors.

Marcus Peter, Partner

We have a long-standing and far-reaching understanding of the funds sector and its market participants.

Assets and investments require a proper game plan. Supported by expert advice.

Alongside capital markets, the investment funds industry plays an important role in the financial sector, in particular in Luxembourg. Meanwhile, fund-linked investments are becoming increasingly interesting products on the financial market for companies and project developers. Investment funds allow investors to combine funding and to expand the horizons of their investment strategies by bundling capital, while diversifying risk at the same time. “Invest together to minimise risks” – this is the basic idea behind the funds industry.

Now that European standards regulate the industry, investment funds can cater to the demand for standardised investment opportunities in various asset classes on a transnational level. At the same time, the Luxembourg investment funds legislation offers sufficient scope and flexibility to take into consideration – via special structures –the individual needs and requirements of different categories of investors.

The team at GSK Stockmann offers professional advice to clients who want to preserve or develop long-term potential in the investment funds industry, and who require support with investment processes. Our client base includes sponsors aiming to establish an investment fund, service providers such as asset management companies and AIFMs, portfolio managers, investment advisors and third-party distributors, but also predominantly institutional investors such as banks, insurance companies and pension funds.

Our investment funds team can bring many years of experience to bear, and an in-depth understanding of the investment funds industry and the market players involved. Our expertise in the field of the structuring of investment funds including any regulatory and tax aspects in Luxembourg and Germany – two highly important markets for investment funds – enables us to focus on the essentials and offer you tailored advice and support.

Our lawyers and tax experts understand the challenges of the investment funds industry from more than just the legal and tax perspectives. We take an integrated and comprehensive approach, focussing on the practical perspective of our clients and their business partners. Your goals are our benchmark – your perspective.

Furthermore, our diversified Luxembourg investment funds team consist of several different nationalities, and hence speaks the languages and understands the specific needs of our international clients. By way of example, we have team members fluent in English, German, French, Mandarin, Cantonese, Russian, Italian, Turkish, Finnish, Swedish and Greek.

Finally, our lawyers are active members in a range of German, Luxembourg and European associations such as the BVI, BVK, BII, ALFI, LPEA, InvestEurope and the ZIA. This involvement enables us to monitor and influence legislative developments on your behalf, and to gain vital market intelligence.

Investment structures must be
well-throught out.
Using structured advisers.

Clients in focus

If your intention is to make the most of every opportunity for growth across the board, top-notch legal support is crucial. Our bundled expertise in the investment funds sector is the answer.

If you are contemplating to establish an investment fund in Luxembourg, or aim at restructuring, merging or updating the legal and regulatory framework of an existing investment vehicle, we can provide you with comprehensive advice and support for your project. Our clients are investment funds initiators such as insurance companies, pension funds, family offices, (asset) management companies or AIFMs, asset managers, portfolio managers and investment advisors, and we can advise them in relation to any product of the Luxembourg toolbox: Be it retail funds such as UCITS, alternative investment funds such as RAIFs, unregulated partnership structures, SIFs, SICARs or part II funds, but also EuVECA, EuSEF and ELTIF.

Our clients are international, and reflect the attraction of Luxembourg as a global hub for structuring and distributing investment funds in the European Union and beyond. In addition, due to the intensive cross-border collaboration between our Luxembourg and German offices, we are particularly well positioned to provide advice to investment fund initiators with a focus on German investors.

We will help you launch your business model on the market, or align it to the latest legislative or tax-related requirements. We also provide professional advice and support to help you achieve your operative goals – whether planning, structuring and placing funds products, or transactions in the various asset classes.  

If you are a professional manager or investment advisor in your asset class, but have consciously decided not to venture into the regulatory field on your own? We can help you realise your project of establishing the appropriate Luxembourg investment vehicle, for example using our contacts to involve regulated business partners in Luxembourg such as third party AIFMs or management companies, white label platforms or placement agents.  

All activities in the investment funds industry center around the capital invested by various types of investors. In recent years, consistently low interest rates for classic investment products have forced investors to search for alternative investment opportunities with potentially higher yields. The steady increase of capital into investment funds, in particular in the alternative asset classes such as private equity, venture capital, real estate or private debt, is the logical result. Such investment vehicles and their documentation, however, is frequently of considerable complexity and the typical challenges and pitfalls or what is considered to be market practice are not easy to navigate. Our Luxembourg investment funds team is closely acquainted with the concerns of institutional investors such as banks, insurance companies, pension funds and family offices, and offers these organisations comprehensive advice and support for fund-linked investments. Such assistance ranges from reviewing the investment funds documentation and establishing detailed due diligence reports, to negotiating such documentation with our client’s counterparties and  drafting, reviewing and negotiation of side letters.

The Luxembourg investment funds industry is highly specialised and therefore diversified. Each service provider therein plays a vital role  in the industry and is subject to its own specific regulations.

Our investment funds team in Luxembourg not only offers professional advice at the intersection between investment funds initiators and service providers, but can also help AIFMs, management companies, depositaries, administrators, investment advisors, distributors or other market players to comply with and implement all regulatory requirements. As a result of our consistently integrated and comprehensive approach, our Luxembourg investment funds team understands the ways in which these players interact with investment funds initiators, and can deploy its expertise on behalf of each respective side.

Key areas of expertise

The right experts for every challenge, the perfect team for every client: We focus on the elements that drive your success.

The investment funds team at GSK Stockmann can offer advice and support with the establishment and licensing process of (asset) management companies and AIFMs in Luxembourg and Germany. We regularly guide such companies through the jungle of supervisory and tax-related questions connected with collective asset management business models, or with the acquisition, sale, merger or restructuring of (asset) management companies in accordance with corporate law. We have excellent connection and long-standing experience with each of the financial regulators, be it the CSSF in Luxembourg or the Bafin in Germany.

Alongside asset management companies and AIFM, we apply our legal expertise to all other market players that are active in the investment funds industry. Examples of what we can do for you:

  • Preparing and conducting any regulatory approval procedures for (asset) management companies, AIFMs or investment funds themselves with the CSSF and Bafin, be it for acquiring a license for the first time or extending it to new asset classes
  • Reviewing and amending any investment fund related documentation such as prospectuses, offering documents, service provider agreements or any corporate documents
  • Providing advice and support to (asset) management companies, or the AIFs or UCITS managed by them, with any approval, filing or notification procedures with supervisory authorities

When fund initiators envisage to launch a new investment fund product, we are your one-stop shop for comprehensive legal advice and support – including advice on cross-border legislation and taxation. The lawyers and tax experts in our teams in Luxembourg and in Germany have all relevant supervisory, tax-related and asset-specific expertise, and are keenly aware of the regulatory framework which governs in particular institutional investors.

We will help you develop the best structures for your investment funds project – whether open-ended or closed-ended funds, retail funds or alternative investment funds aimed at professional investors, in Luxembourg or in Germany.  Our legal services focus primarily on the following asset classes:

  • Real estate
  • Private equity
  • Venture capital
  • Debt funds
  • Hedge funds
  • ESG funds
  • UCITS and other liquid strategies

Our Luxembourg investment funds team can advise on any type of investment fund product out of the Luxembourg tool box. Depending on the type of assets which are targeted, the type of investors that your product aims at and your requirements from a corporate and regulatory perspective, we will identify the most efficient and practical structure for your project. This includes in particular the following types of Luxembourg investment funds:

  • UCITS
  • Part II – Funds
  • Specialised investment funds (SIF)
  • Investment companies in risk capital (SICAR)
  • Reserved alternative investment funds (RAIF)
  • Unregulated partnerships (SCS/SCSp)

In addition to developing and supporting funds vehicles, we can provide comprehensive advice and support throughout the entire transaction process in order to help you implement your investment strategies. In particular, we help you by:

  • Structuring purchases and sales in accordance with regulatory and tax requirements
  • Conducting legal and tax-related due diligence (taking the respective asset class into account)
  • Negotiating contracts
  • Supporting transactions with legal advice on supervisory and tax-related aspects

Luxembourg is, by a large margin, the first choice for distributing investment funds in Europe and beyond. There are various distribution structures for investment fund products, all of which are subject to countless country-specific and European regulations such as the UCITS or the AIFM passport. More recently, we have seen new market players taking the stage with innovative digital marketing platforms. Regardless of whether you are an established market player with a conventional sales structure, or a new service provider with a “disruptive” business model, GSK Stockmann offers advice and support to investment product providers and intermediaries in Luxembourg and Germany on all aspects of cross-border sales. In addition, we can help you sell your product via banks or MiFID companies, or via so-called “free” sale through intermediaries in Luxembourg and Germany.

Are you considering investing in an investment fund on a (semi) professional level, or as an institutional investor? GSK Stockmann will be happy to conduct comprehensive due diligence checks on your behalf, guide you through the participation process and draft or negotiate side letters. We are keenly aware of the needs and concerns of institutional investors – who are in turn subject to regulatory requirements from a banking law or insurance law perspective – and can therefore offer advice and support for your fund-linked investments.

GSK Stockmann offers tailored legal advice on aspects of compliance which are affected by supervisory law. These currently include issues such as AML/KYC procedures and investor-related compliance which arise from MiFID, SFTR, GDPR and PRIIPs requirements, or also ESG related aspects in the wake of the EU action plan for sustainable finance.

Your contacts.

Understanding your perspective. And finding the best solution. This is our mission:

Dr. Marcus Peter, LL.M.

Partner

+352 271802-50

marcus.peter@gsk-lux.com

Dr. Marcel Bartnik

Local Partner

+352 271802-80

marcel.bartnik@gsk-lux.com

Mathilde Ostertag

Partner

+352 271802-60

mathilde.ostertag@gsk-lux.com

© GSK Stockmann 2021