Private Equity & Venture Capital
Over the past 20 years, Luxembourg Luxembourg has won international recognition as a pre-eminent jurisdiction for structuring private equity and venture capital funds and deals alike.
Luxembourg has built its market share thanks to its non-regulated special purpose companies (such as the SOPARFI - financial participation company) which are used for private equity acquisitions and financings alike.
Traditionally, private equity firms have been averse to submitting their funds to regulation. With the introduction of the SICAR (investment company in risk capital - société d’investissement en capital à risque) a dedicated private equity and venture capital investment vehicle in 2004 and the SIF in 2007, a significant number of international private equity houses started to shift their fund platforms from certain off-shore centres to Luxembourg, thereby opting for product regulation often to the benefit of their fund raising efforts. In the context of increased prudential supervision of financial activities worldwide, this trend is set to amplify in the years to come.
With the proposed Directive regulating alternative managers, Luxembourg is clearly positioning itself as the Pan-European hub for alternative investments funds (AIF) or non-UCITS.