The Luxembourg Finance Ministry has submitted a draft bill transposing the European Alternative Investment Fund Managers Directive to the Luxembourg Parliament.
“ALFI strongly believes that the AIFMD presents a welcome opportunity for Europe to create a brand in the alternative investment market, similar to the global brand it has created with Ucits,” says Camille Thommes (pictured), director general of the Association of the Luxembourg Fund Industry (ALFI). “Through AIFMD, the European Union is creating the first regulated environment for alternative investment funds worldwide.”
He adds: “ALFI believes that the Luxembourg Government’s ambition to be a first-mover in transposing the directive puts the Luxembourg financial centre, which is already well-established in the ‘alternative’ sphere, in a strong competitive position to develop the hedge, real estate and private equity activities even further. In Luxembourg, alternative funds have been subject to specific regulation aiming at protecting investors and offering flexible structuring opportunities to asset managers for many years. Therefore, the Luxembourg regulator is already familiar with the specific requirements of this industry sector.
“In addition, the Luxembourg draft bill incorporates two major features which ALFI believes will be of particular interest to the alternative investment fund community. First, the creation of a limited partnership structure, which will add a flexible and secure partnership structure to Luxembourg’s fund product offering and which might be particularly appealing to investors familiar with such a structure based on the Anglo-Saxon model. Secondly, the draft bill provides for additional clarifications regarding the taxation regime of the carried interest.”
Thommes concludes: “The AIFMD involves the introduction of a European passport for alternative investment fund managers who wish to access the entire European market, and given Luxembourg’s position as the European leader in the cross-border space, it is expected that implementation of the AIFMD will further enhance Luxembourg as a leading domicile for fund and management companies in the alternative sector.”