Investment Funds
Our investment funds practice area serves the whole investment management value chain.
We offer comprehensive legal services for the structuring and formation of both regulated and unregulated investment funds, including UCITS, Alternative Investment Funds (AIFs) and Pension Funds, as well as ongoing advice in relation thereto.
Our domestic and international clientele encompasses fund promoters, distributors, investment bankers, asset managers, depositary banks, administration and other agents providing fund-related services.
The practice area also handles domestic and international acquisitions, reorganisations and financings representing buyers and sellers in asset and share deals for AIFs, their managers, advisors and initiators.
Leadership
Around 140 lawyers specialised in regulatory, corporate and/or transactional matters are thus integrated in a single practice area, a unique feature in the Luxembourg legal services market. We are the largest team by experience and market share in Luxembourg, as confirmed in the Fitzrovia league tables which rank Arendt as the leading law firm in investment funds, representing more than 35 per cent of all Luxembourg regulated investment funds. We offer our clients a global investment management platform, supported by our offices in the world’s leading financial centres i.e. London, New York, Dubai and Hong Kong, where we can provide local assistance in respect of Luxembourg legal matters.
Our practice area is based on two main components, i.e. i) fund structuring/formation in relation to all investment management-related matters and ii) corporate transactional skills.
In relation to fund structuring/formation matters, two main fund/product classifications can be established:
- private closed-ended funds and special purpose vehicles (i.e., private equity and real-estate funds);
- public and private open-ended funds including UCITS as well as hedge funds and other funds investing in assets other than private equity and real-estate;
The importance of the corporate transactional aspect has increased with Luxembourg’s international recognition as one of the leading international acquisition and financing hubs, mostly in relation to private equity or real-estate buy-out transactions. This aspect has thus evolved with the Luxembourg market and now serves the entire investment value chain.
Solution-driven approach
We accompany our clients throughout the entire project duration, from product design to implementation, adopting a solution driven hands-on approach. Our advice aims at delivering tax efficient and innovative structuring solutions regarding complex financial instruments and transactions.
We also work closely with our colleagues from the other practice areas of the firm for any issue requiring their specific expertise in the setting-up of any type of fund.
Fund-structuring advisory services
We are regularly involved in the following aspects:
- advising on UCITS and assimilated investment strategies, including but not limited to sophisticated or “alternative” UCITS;
- advising on UCITS IV implications;
- advising on hedge fund strategies, including funds of hedge funds;
- advising on private equity (PE) and venture capital (VC) fund strategies, including but not limited to start-up funds, expansion capital funds, development and turn-around funds or buy-out funds;
- advising on real estate and private equity real estate (PERE) fund strategies;
- advising on and designing the contractual relationship between investment vehicles and their services providers, such as the depositary, prime broker, investment manager, investment advisor, administration agent and other agents providing fund-related services;
- advising on the implementation of complex investment strategies, including specific derivatives transactions, securities lending or collateral-related topics;
- generally advising on all asset management related issues and topics.
We also provide assistance in relation to the registration of Luxembourg funds in other jurisdictions (with local support) as well as the registration of foreign funds in Luxembourg.
Corporate transactional advisory services
In relation to corporate transactional advisory services, we advise an international client base on all corporate matters, and in particular as to:
- domestic and cross-border mergers and acquisitions;
- asset deals;
- complex multi-jurisdictional corporate restructurings;
- change of control transactions, including tender and exchange offers;
- going private transactions;
- initial public offerings;
- joint ventures;
- refinancings;
- liquidations.
Our services also include the provision of corporate secretarial services.
Industry commitment and participation
We are represented in a considerable number of strategic committees and working groups of the supervisory authority of the financial sector in Luxembourg (CSSF) and of the Association of the Luxembourg Fund Industry (ALFI). Representatives of our firm are also founding or active members of the Luxembourg Private Equity and Venture Capital Association (LPEA), the European Private Equity and Venture Capital Association (EVCA) and LuxReal.
AIFs
The practice area members have substantial experience in the creation of alternative investment funds such as Hedge Funds, Private Equity Funds and Real Estate Funds. We have also been involved in the setting-up of numerous alternative funds investing in other assets such as microfinance, SRI, art, vessels or life-settlement products. We provide comprehensive legal advice to our clients on all aspects of the establishment and operation of each of these types of alternative investment funds. In this respect, we also assist our clients in identifying and implementing efficient solutions for complying with the new Alternative Investment Fund Managers Directive.
Pension Funds
Our firm was involved in the first pension funds established under Luxembourg’s pension fund legislation when it came into force in 1999. Since then we have continued to help employers and sponsors to design and implement, under Directive 2003/41/CE on institutions for occupational retirement provision, as implemented in Luxembourg legislation, pension fund structures operating both locally and cross-border.
In close collaboration with the practice area “Employment Law, Pensions, Benefits”, we advise on employment, investment, tax, as well as wider issues which affect the pension industry. More particularly, we assist multinationals and managers to enhance and rationalise the management of pension assets through the use of pension-pooling vehicles benefiting from an advantageous tax treatment.
UCITS
Our firm offers a comprehensive service regarding all aspects of the setting-up, registration, reorganisation and expansion of UCITS.
Our lawyers are also closely involved in the structuring and setting-up of the so-called “alternative UCITS”, i.e. UCITS which are making use of highly sophisticated instruments such as structured financial instruments or derivatives in order to pursue investment strategies which are comparable to those of a hedge fund. We provide high quality tailor-made advice to clients seeking to benefit from the enlargement of the scope of eligible assets under UCITS and the resulting convergence between UCITS and hedge funds.
We advise clients on innovative and business-oriented solutions in view of their compliance with the new UCITS IV requirements, including in particular any substance-related questions concerning UCITS and their management companies (e.g. organisational requirements, conflicts of interest rules, conduct of business rules and risk-management procedures) as well as on the implementation of a key investor information document.
Hedge Funds
We provide assistance to our clients regarding the setting-up of traditional hedge fund structures, i.e. hedge funds that do not need the EU passport and therefore benefit from an enhanced flexibility compared to “alternative” UCITS in terms of investment strategies and restrictions. Our team also provides ongoing legal advice to hedge funds. Luxembourg hedge funds may take the form of single hedge fund vehicles or funds of hedge funds. We are familiar with funds using a wide variety of alternative investment strategies and provide highly specialised advice to our clients regarding the implementation of such strategies according to the regulatory framework in Luxembourg.
We are further active in the structuring of the specific contractual relationships between hedge funds and their service providers, such as prime brokers, swap counterparties, investment managers and/or custodian banks.
Private Equity Funds
Our expertise covers all the aspects relating to the structuring and organisation of, and investments made by, private equity houses, managers or advisers. This includes in particular legal advice relating to compliance with any regulatory requirement (e.g. in relation to private equity funds set up as SICARs or SIFs), the acquisition and financing of private equity businesses, the implementation of carried interest schemes, executive compensation and ownership schemes, as well as advice on fundraising.
Real Estate Funds
The real estate team members have an in-depth market knowledge and expertise in the structuring and implementation of real-estate funds. Legal professionals having a regulatory, transactional and/or corporate law background work in a single team, thus being able to offer our clientele composed of promoters, investment managers and investors comprehensive advice on the structuring of any form of real-estate investment vehicles. We have been involved in the structuring of many significant real-estate funds, including in particular the crafting of investor co-decision rights, carried interest schemes, debt financing arrangements and capital market-related aspects.
We also assist our clients in their ongoing investment activities in Luxembourg and abroad and in the financing of the projects which are generally handled by such real-estate funds.