Annual UCITS & Private Equity Seminar: Latest news from ... - ny annua… · 23 April 2013 – New...
Transcript of Annual UCITS & Private Equity Seminar: Latest news from ... - ny annua… · 23 April 2013 – New...
23 April 2013 – New York
Annual UCITS & Private Equity
Seminar:
Latest news from Luxembourg
Stream 1: UCITS
Carine Feipel, Partner
Sandra La Sala, Senior Associate
New York, 23 April 2013
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Agenda
Introduction: some facts, figures and names
Main features of a UCITS in Luxembourg
UCITS IV : where do we stand?
Upcoming legislation:
UCITS V
UCITS VI
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Introduction:
some facts, figures and names
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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European Net Assets since 1998
Source: EFAMA
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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The UCITS market
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Luxembourg market share of promoters
Source: CSSF-ALFI
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Luxembourg market share of promoters in AuM
Source: CSSF-ALFI
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Top 30 cross-border fund managers Ranking
Management group name
Countries of sale
at group level
First choice
Fund domicile Countries of sale
1 FRANKLIN TEMPLETON 50 Luxembourg 48
2 FIDELITY WORLDWIDE INVESTMENT 43 Luxembourg 42
3 HSBC HOLDING 40 Luxembourg 37
4 BNP PARIBAS 39 Luxembourg 37
5 BLACKROCK 37 Luxembourg 31
6 SCHRODERS 35 Luxembourg 28
7 DEUTSCHE BANK 32 Luxembourg 25
8 ALLIANZ GROUP 31 Luxembourg 30
8 AMUNDI 31 Luxembourg 27
10 UBS 30 Luxembourg 29
11 JP MORGAN 29 Luxembourg 29
11 ING GROUP 29 Luxembourg 27
13 INVESCO 28 Luxembourg 27
14 HENDERSON GROUP 27 Luxembourg 26
14 ABERDEEN ASSET MANAGEMENT 27 Luxembourg 26
16 PIONEER INVESTMENTS 26 Luxembourg 24
16 PIMCO 26 Ireland 23
16 BNY MELLON / WESTLB MELLON 26 Ireland 22
16 GOLMAN SACHS 26 Luxembourg 21
16 LEGG MASON 26 Ireland 21
21 BARCLAYS GROUP 25 Ireland 17
22 INVESTEC 24 Luxembourg 23
22 PICTET & CIE 24 Luxembourg 23
22 THREADNEEDLE 24 Luxembourg 18
25 RBS GROUP 23 Luxembourg 22
25 ALLIANCEBERNSTEIN MANAGEMENT 23 Luxembourg 22
25 PINEBRIDGE INVESTMENTS 23 Ireland 22
25 CREDIT SUISSE 23 Luxembourg 21
29 MORGAN STANLEY 22 Luxembourg 21
29 LLYODS TSB GROUP 22 Jersey 9
31 SKANDIA GROUP 21 Ireland 20
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
Source: Lipper LMI
and PwC analysis as
at 31 December 2011
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Cross-border distribution of UCITS
(number of registrations)
Source: PwC - UCITS Fund Distribution 2012 - September 2012
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Number of cross-border UCITS funds and registrations
Source: PwC - Benchmark your Global Fund Distribution - March 2013
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Domicile share of authorisations for cross-border
distribution
Source: PwC - Benchmark your Global Fund Distribution - March 2013
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Main features of UCITS in Luxembourg
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Main features of a Luxembourg UCITS
Legal form : corporate (SICAV/SICAF) / contractual (FCP)
General structure: open-ended
umbrella (compartments) / single fund
classes and series possible
Investors : shareholders (voting rights) / unitholders (optional)
Governing body : board of self-managed SICAV / management company
Management committee: minimum 2 conducting officers
Capital : Fixed / variable – Min EUR 1,250,000 after 6 months
Luxembourg service providers: depositary, central admin, auditor
Promoter: no longer required in Luxembourg
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Transferable securities and
structured financial instruments
Money market instruments
Units of UCITS and other eligible UCIs
Deposits with credit institutions
Derivatives based on eligible
underlying assets
Efficient portfolio management
techniques (e.g. repo, sec. lending)
Eligible assets - UCITS III heritage
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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UCITS ETFs, actively managed UCITS ETFs
and rights of secondary market
investors
Efficient portfolio management
techniques, including repo and reverse repo
agreements
Financial derivative instruments, in
particular total return swaps and similar
instruments
Collateral requirements for OTC derivatives
and efficient portfolio management techniques
Index-tracking UCITS, index-tracking
leveraged UCITS Financial indices
Eligible assets (cont.): ESMA Guidelines
ESMA Guidelines on ETFs and other UCITS issues (2012/832)
Entered into force on 18 February 2013 (implemented in Luxembourg)
subject to transitional provisions
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Substance and organisational requirements
CSSF Circular 12/546: new substance and organisation requirements for
UCITS / management companies:
Permitted activities
Share capital requirements
Board of directors
Conducting persons / Management Committee
Delegation of activities
Central administration - Head office in Luxembourg
Technical and human infrastructure
Administrative and accounting requirements
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Substance and organisational requirements
CSSF Circular 12/546: new substance and organisation requirements for
UCITS / management companies (cont.):
Permanent compliance function
Permanent internal audit function
Permanent risk management function & risk management process
Personal transactions
Conflict of interests
Rules of conduct
Complaint handling
External audit
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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UCITS IV : where do we stand?
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Rules and procedures to offer ManCo services on a cross-border basis:
notification to authorities of the EU Member State where the ManCo
has been authorised
compliance with:
- ManCo national rules as regards organisation and conduct of business; and
- rules applicable to the UCITS in its home Member State re. setting-up / running of
the UCITS
- rules of conduct of UCITS home Member State if ManCo provides services
through a branch
- ManCo national rules if ManCo provides services under the freedom to provide
services
depositary agreement: specific provisions to be inserted
Possibility to use a « dual ManCo » for both UCITS and Alternative Funds (AIFM)
Management Company (« ManCo ») Passport for UCITS
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Management Company Passport for UCITS (cont.)
Source: ALFI - Trends in Global Distribution - September 2012
Tools used by asset managers for their cross-border distribution
now and in 3 years time: intention to use the ManCo passport
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Marketing of new UCITS or sub-funds: regulator to regulator notification
Required steps
submission of notification documents to the CSSF
transmission from CSSF to host Member State within 10 days (generally 2
days in practice)
host Member State to review the file within 5 working days of its receipt
UCITS may start marketing its units in the host Member State as of the date
of transmission
Notification documents
notification package determined by the UCITS Directive
host Member State cannot request further documents / information
host Member State must have electronic access to documents
Language requirements
only the KIID must be in the official language of the host Member State
Marketing: EU notification procedure
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Pooling effect
Customization effect
Condition: feeder UCITS must invest at least 85% of its assets in
the master UCITS / its sub-funds
Master-Feeder structures
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Master-Feeder structures (cont.)
Tools used by asset managers for their cross-border distribution
now and in 3 years time: intention to use master-feeder structures
Source: ALFI - Trends in Global Distribution - September 2012
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Unique EU regime for cross-border mergers of UCITS, aims at:
enhancing the quality of fund management
reducing operational risks and costs
increasing transparency and investor protection
Regulator-to-regulator procedure between the competent authorities of
the home Member States of the merging UCITS
Cross-border mergers of UCITS
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Cross-border mergers of UCITS (cont.)
Source: ALFI - Trends in Global Distribution - September 2012
Tools used by asset managers for their cross-border distribution
now and in 3 years time: intention to use cross-border mergers
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Upcoming legislation
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Upcoming legislation: UCITS V
Proposal for UCITS V Directive
EU Commission proposal of 3 July 2012 for a UCITS V Directive
Expected entry into force in 2015
3 main topics:
remuneration policies
depositary
sanctions
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Upcoming legislation: UCITS V
Proposal for UCITS V Directive
Remuneration policies
Implementation of a remuneration policy
- sound and effective risk management
- no disproportionate risk taking
Transparency: disclosure in the annual report
Review: remuneration committee
Rules on performance-based remuneration
Appropriate balance between fixed and variable components
Deferral of part of variable component
Part of variable component to be paid out in units/shares of UCITS
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Upcoming legislation: UCITS V
Depositary
Eligibility
Duties
Liability
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Upcoming legislation: UCITS V
Sanctions
Effective, dissuasive and proportionate sanctions
Minimum catalogue of administrative sanctions and measures
Minimum scope: breaches of main investor protection safeguards
Minimum list of sanctioning criteria
Investigatory powers
Whistle-blowing
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Upcoming legislation: UCITS VI
Consultation for UCITS VI Directive (EU Commission 26 July 2012)
Eligible assets and use of
derivatives?
Efficient portfolio management techniques?
OTC derivatives?
Extraordinary liquidity
management tools?
Money market funds?
Depositary passport?
Long-term investments ?
Addressing UCITS IV?
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
Contact us
Carine Feipel
Partner
Tel : (+ 352) 40 78 78 784
Sandra La Sala
Senior Associate
Tel : (+1) 212-554-3547
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Stream 2:
Private Equity, Real Estate and Acquisition
Structuring
Pierre Beissel, Partner, Co-Head of PE/RE
Bob Calmes, Head of NY Representative Office
New York, 23 April 2013
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Contents
Luxembourg: European PE/RE and Acquisition Structuring
Servicing Hub
2012-2013 : Challenges & Opportunities
Luxembourg Toolbox
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Evolution from PE/RE acquisition gateway to regulated PE funds centre
Leading PE /RE service providers present in Luxembourg
Leading global PE houses and real estate managers operating in Luxembourg
PE:
US$ 50 billion in assets
PE:
Over 350 funds
Luxembourg - A leading European hub for PE /RE /
Acquisition Structuring
RE:
US$ 30 billion in assets
RE:
Over 170 funds
•Approx.
35,000
•holding
and
financing
SPVs
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3i
American Capital
Apax Partners
Bain Capital
BC Partners
Blackstone
Carlyle
Cinven
CVC
Fortress
Goldman Sachs
Global private equity houses using Luxembourg as a centre of excellence
Investcorp
JP Morgan
KKR
Kreditanstalt für Wiederaufbau
(KfW)
Lazard
LGT Capital Partners
Oaktree Capital
Permira
Unicapital
Warburg Pincus
Luxembourg –
A growing European hub for private equity
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York
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Global real estate managers using Luxembourg as a center of excellence
Aberdeen
AMB Capital
Aviva
BlackRock
Blackstone
BNP Paribas
Carlyle
CBRE Investors
Cordea Savills
Deutsche Bank
ECE
Heitman
Henderson Global Investors
Hines
ING
JP Morgan
LaSalle
Morgan Stanley
Pramerica
ProLogis
Schroders
Threadneedle
Tishman Speyer
Luxembourg –
A leading European hub for real estate
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New
York
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Contents
Luxembourg: European PE/RE and Acquisition Structuring
Servicing Hub
2012-2013 : Challenges & Opportunities
Luxembourg PE/RE Toolbox
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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2012-2013 Challenges & Opportunities
Challenges:
Regulatory tsunami in the EU and US
European debt crisis
Opportunities:
infrastructure convergence
On-shore migratory trends
Luxembourg to introduce new industry focused products in 2013
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Contents
Luxembourg: European PE/RE and Acquisition Structuring
Servicing Hub
2012-2013 : Challenges & Opportunities
Luxembourg PE/RE Toolbox
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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SOPARFI (Holding-
acquisition
structuring)
Securitization SIF (Alternative
Fund) SICAR (Venture
Capital)
Eligible Assets All assets All types of risks All assets All risk related
assets
Targeted
Investors
All Investors All investors Qualified Investors Qualified Investors
Legal Form Corporate or
partnership
Company / Contractual Fund
Corporate/ Partnership /
Contractual Form
Company or
partnership
Luxembourg toolbox / corporate summary
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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SOPARFI Securitization SIF SICAR
Direct tax
(CIT and MBT)
Fully taxable, but:
-Access to DTT
-Access to
participation
exemption
- Cash repatriaton
techniques
Taxable, but committments
towards investors are deductable
Tax exemption (+ transparency if contractual form)
Specific exemption
for risk
investments
WHT 15% on dividends
(except
participation
exemption or treaty
reduction)
No No No
DTT Yes Yes in principle Limited access Yes in principle
Subscription Tax n/a No 0.01% subscription tax
n/a
Luxembourg toolbox – tax summary
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Contents
Luxembourg: European PE/RE and Acquisition Structuring
Servicing Hub
2012-2013 : Challenges & Opportunities
Luxembourg PE/RE Toolbox
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Partnership limited by shares
(SCA)
Common limited partnership
(SCS)
Special limited partnership
(SCSp)
Key Features
Corporate partnership limited by shares
with legal personality one or more
shareholders being jointly and severally
liable for the obligations of the SCA and at
least one different limited shareholder with
limited liability (up to their promised
contribution to the SCA)
Limited partnership with legal
personality with one or more partners
being jointly and severally liable for
the obligations of the partnership and
at least one limited partner with limited
liability (up to their promised
contribution to the partnership)
Limited partnership without legal
personality with one or more
partners, being jointly and severally
liable for the obligations of the
partnership and at least one limited
partner with limited liability (up to
their promised contribution to the
partnership)
Widely used for regulated and unregulated
vehicles. Particularly convenient for PE
funds initiators who want to retain total
control over the management and have a
“corporate” fund
Particularly convenient for PE
transactions where tax transparency
is required at the level of the fund and
fund initiator wants to retain total
control over the management
Particularly convenient for PE
transactions where tax
transparency is required at the level
of the fund and fund initiator wants
to retain total control over the
management while operating in a
non-public environment
Technical adjustments will be made to the
SCA regime by the Bill implementing the
AIFMD
Existing regime overhauled by the Bill
implementing the AIFMD
New partnership regime introduced
by the Bill implementing the AIFMD
Limited contractual flexibility High contractual flexibility High contractual flexibility
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Partnership limited by shares (SCA) Common limited
partnership (SCS)
Special limited
partnership (SCSp)
Duration Limited or unlimited Limited or unlimited
Constitutive
documents
• Articles of association
• Notarial deed
• Limited partnership agreement
• No notarial deed
Minimum capital €31,000 or equivalent in another currency No minimum
Contributions In cash and/or in kind In cash and/or in kind or sweat equity
Capital calls
Variable Capital
only if SIF/SICAR:
No requirement to
amend the articles
of association
before a public
notary
Fixed Capital
Requirement to
amend the articles
of association
before a public
notary
Freely determined in the LPA
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Partnership limited by shares (SCA) Common limited
partnership (SCS)
Special Limited
Partnership (SCSp)
Liability
• Unlimited shareholders/ GP:
indefinitely, jointly and severally liable
for the obligations of the SCA
• Limited shareholders: limited to
amount contributed/promised for
contribution
• A limited partner may take part in the
internal management and maintain
limited liability
• A limited partner may lose its limited
liability by taking part in the external
management
• Unlimited partners/ GP: indefinitely, jointly
and severally liable for the obligations of
the partnership
• Limited partners: limited to amount
contributed/promised for contribution
• A limited partner may take part in the
internal management and maintain limited
liability
• A limited partner may lose its limited
liability by taking part in the external
management
Management Manager must be a general partner (to
be changed).
GP cannot be dismissed without its own
consent unless otherwise provided in the
articles of incorporation
The general partner or other manager
appointed in accordance with provisions of
LPA; if manager is not the general partner,
the manager will only be liable for the
execution of its mandate and any misconduct
in the management
Removal freely determined by the LPA
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Partnership limited by shares (SCA) Common limited
partnership (SCS)
Special Limited
Partnership (SCSp)
Collective
decisions /
Quorum voting /
Rights
• Ordinary Resolutions: no quorum
and simple majority of vote
• Extraordinary Resolutions: 50%
quorum and 2/3 majority
• Change of nationality and increase of
shareholders commitment: unanimity
The GP has a veto right (unless
otherwise provided for by the articles of
association)
Freely determined by the LPA otherwise
default rules will apply:
• Amendments to LPA: consent of partners
representing ¾ of partnership interests and
GP veto right
• Other decisions: majority of votes cast
• Mandatory rules possible
Transfers
• Shares of limited shareholders freely
transferable
• Shares of unlimited shareholder/ GP:
transferable subject to certain
conditions
• Freely determined by the LPA otherwise
restricting transfer provisions apply by
default
Allocation of
profits and losses
and distributions
• Freely determined in the articles of
association to the extent the minimum
share capital and legal reserve is
maintained
• Freely determined in the LPA
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Partnership limited by
shares (SCA)
Common limited
partnership (SCS)
Special Limited
Partnership (SCSp)
Annual accounts
Must produce annual
accounts (which must be
audited if a SIF or SICAR)
and management reports
Must produce annual
accounts (which must be
audited if a SIF or SICAR)
and management reports
No unless predetermined by
the LPA. Mandatory reports
if a SIF or SICAR
Audit Upon legal requirement,
subject to audit
Upon legal requirement,
subject to audit Voluntary basis
Publication
requirements
• Full articles of association
and amendments
• Annual accounts
• Consolidated accounts
• Identity of GP (only)
• By excerpts
• Annual Accounts
• Identity of GP (only)
• By excerpts
• Identity of GP (only)
Tax transparency
Not tax transparent (but
check-the-box eligible for US
purposes)
Tax transparent Tax transparent
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Contents
Luxembourg: European PE/RE and Acquisition Structuring
Servicing Hub
2012-2013 : Challenges & Opportunities
Luxembourg PE/RE Toolbox
The New Luxembourg LP: A pragmatic approach to corporate
flexibility
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
52
NON EU AIF
NON EU AIFM
EU and Non-EU investors
Non-EU
AIF
(Cayman)
Non-EU
AIFM
(USA)
Professional EU and
Non-EU investors
Lux SPV
Investments
AIFMD Case Study
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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July
2013
Implementation into national law
New Luxembourg AIF/AIFM to comply
with AIFMD
Passport for EU AIFM / EU AIF
2015
Passport for third country AIFM + AIF
2018
End of private placement regimes
Timeline
All Luxembourg AIF/AIFM to comply
with AIFMD
July
2014
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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EU AIFM which manage one or more AIF (EU or Non-EU)
Non-EU AIFM which manage one or more EU AIF
Non-EU AIFM which market one or more AIF (EU and Non-EU) in the
EU
Exclusions: holding companies, institutions for occupational
retirement, supranational institutions, national central banks, government
bodies which manage social security and pension systems, employee
participation/savings schemes
Scope
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Is the AIF distributed in the
EU?
NON-EU AIF
NON-EU AIFM
AIFMD DOES NOT APPLY
2013-2018: National Placement Rules
+ AIFMD provisions on transparency and controlling interests
Partial 3rd Country Requirements
Dual Regime:
Yes
No
Third countries regime
From 2015:
EU Passport
Full AIFMD applies
+ Full 3rd Country Requirements
+ MSR
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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FROM 2013 TO 2018:
MARKETING WITHOUT A PASSPORT
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Non-EU
AIF
(Cayman)
Non-EU
AIFM
(USA)
Professional EU and
Non-EU investors
Lux SPV
Investments
From 2013 to 2018 :
First Option: reverse solicitation
Reverse solicitation
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Reverse solicitation: Marketing is defined in the AIFMD as any direct or
indirect offering or placement at the initiative of the AIFM or on behalf of the
AIFM of managed AIF to investors domiciled or with registered office in the
EU
existing investors contacting the fund/AIFM to express interest in
future funds
For professional investors only
Cannot be used as a placement strategy
From 2013 to 2018 :
First Option: reverse solicitation
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Non-EU
AIF
(Cayman)
Non-EU
AIFM
(USA)
Belgian
investors
Lux SPV
Lux SPV
Lux SPV
Investments
From 2013 to 2018 :
Second Option: Private Placement
German
investors
Dutch
investors
Private placement
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Member States may allow non-EU AIFM to market to professional investors,
in their territory only, units of AIF they manage, subject at least to:
Transparency requirements: Annual report
Disclosure to investors
Reporting obligations
Controlling interest requirements: Notification in case of acquisition of control/major holdings of EU entities
Notification in case of acquisition of control of EU entities
Asset stripping prohibition regarding EU entities
Specific third countries requirements Cooperation arrangements in place between the competent authorities of the Member States where the
AIF are marketed, the supervisory authorities of the third country where the non-EU AIFM is established
(i.e. USA) and the supervisory authorities of the third country where the non-EU AIF is established (i.e.
Cayman Islands)
The third country where the non-EU AIFM (i.e. USA) or non-EU AIF (i.e. Cayman Islands) is established is
not listed as a Non-Cooperative Country and Territory by FATF
For professional investors only
Subject to existence of cooperation arrangements
From 2013 to 2018 :
Second Option: Private Placement
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Austria
Belgium
France
Germany
Ireland
Italy
From 2013 to 2018 in Europe:
Private placement: Country overview
The Netherlands
Luxembourg
Spain
Sweden
Switzerland
United Kingdom
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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FROM 2013:
MARKETING WITH A PASSPORT
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Non-EU
AIF
(Cayman)
EU AIFM
(Luxembourg)
Professional EU and
Non-EU investors
Lux SPV
Investments
From 2013 :
Luxembourg AIFM
Non-EU
advisor
(US)
Advisory services
Delegation
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Luxembourg AIFM intending to market non-EU AIF (i.e. a Cayman Islands
AIF) or EU feeder fund of non-EU AIF (i.e. a Cayman Islands AIF) by
using the passport, will have to fully comply with the AIFM Law
In addition, the following third countries requirements apply:
Cooperation arrangements in place between the CSSF and the supervisory authorities of the non-EU AIF
(i.e. the Cayman Islands)
The third country where the non-EU AIF is established (i.e. the Cayman Islands) is not listed as a Non-
Cooperative Country and Territory by FATF
Tax agreements in place between the third country where the non-EU AIF is established (i.e. the Cayman
Islands) and each Member State where the non- EU AIF is marketed
Non-EU AIF to appoint depositary in its jurisdiction (subject to compliance
with third countries requirements) or in the jurisdiction of the AIFM (i.e.
Luxembourg)
Any merit in establishing a Luxembourg AIF (fund of funds) investing
in non-EU AIF to avoid having to comply with third countries and
depositary requirements at Non-EU AIF (i.e. Cayman Islands) level
From 2013: EU Passport
Luxembourg AIFM
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Functions that the AIFM shall perform from Luxembourg (core
functions):
Portfolio management
Risk management
AIFM may, subject to certain conditions, delegate part of its core
functions to an extent that does not exceed by a substantial margin
the core functions performed by the AIFM
Functions that the AIFM may perform from Luxembourg (additional
functions):
Administration: accounting, valuation & pricing, record keeping, etc.
Marketing
Activities related to the assets of the AIF
From 2013: EU Passport
Luxembourg AIFM
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Non-EU
AIF
(Cayman)
EU AIFM
(Luxembourg)
Professional EU and
Non-EU investors
Lux SPV
Investments
From 2013 :
Luxembourg AIFM
US/Cayman
branch
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
67
Core functions to be undertaken from the US by the branch
Additional functions to be performed from Luxembourg
Luxembourg regulator might have specific requirements
Not supported by wording of the AIFMD – To be checked against
general principles
From 2013: EU Passport
Variation 1:
Luxembourg AIFM with a US branch
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
68
Non-EU
AIF
(Cayman)
EU AIFM
(Luxembourg)
Professional EU and
Non-EU investors
Lux SPV
Investments
From 2013 :
Variation 2 – external Luxembourg AIFM Non-EU
advisor
(US)
Luxembourg
service
provider
69
Luxembourg service provides AIFM functions
Option: Luxembourg AIFM may be established as a joint venture with a
Luxembourg service provider
Luxembourg service provider to provide for conducting officers
Luxembourg service provider might also provide infrastructure, processes
and office
From 2013: EU Passport
Variation 2:
External Luxembourg AIFM
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FROM 2015:
MARKETING WITH A PASSPORT BY A
NON-EU AIFM
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
71
Non-EU
AIF
(Cayman)
Non-EU
AIFMD
compliant
AIFM
(US)
Professional EU and
Non-EU investors
Lux SPV
Lux SPV
Lux SPV
Investments
As from 2015 :
Option 1: US AIFM marketing in the EU
Marketing
with a
passport
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US AIFM to be fully compliant with the AIFMD
US AIFM to be assigned a Member State of Reference (MSR) Competent authority of MSR in charge to authorize, supervise and regulate the US AIFM
Determination of MSR subject to specific tests but may be a Member State where the AIFM intends to
develop effective marketing
To be considered: establishment of a Luxembourg AIF (fund of funds) investing in non-EU AIF to
potentially have Luxembourg determined as MSR. Members States may however decide together that the
MSR is the Member State where the Luxembourg AIF is marketed
US AIFM to appoint a legal representative in its MSR
Specific third countries requirements Cooperation arrangements in place between (i) the competent authorities of the MSR of the US AIFM and
the supervisory authorities of the non-EU AIF (i.e. the Cayman Islands) and (ii) the MSR of the US AIFM
and the USA
The third countries where the non-EU AIFM and non-EU AIF are established are not listed as a Non-
Cooperative Country and Territory by FATF
Tax agreements in place between the tax authorities of (i) the MSR of the US AIFM and the USA, (ii) the
third country where the non- EU AIF is established (i.e. the Cayman Islands) and the MSR of the US
AIFM and (iii) the third country where the non- EU AIF is established (i.e. the Cayman Islands ) and each
country where the third country where the non- EU AIF is marketed
As from 2015: EU Passport
US AIFM marketing in the EU
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
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Non-
EU AIF
Luxembourg
AIFM
Professional EU and
Non-EU investors
As from 2015 :
Option 2 : Luxembourg Feeder Fund / Luxembourg
AIFMD
EU
Feeder
Annual UCITS & Private Equity Seminar : Latest news from Luxembourg – 23 April 2013 – New York
Contact us
Bob Calmes
Head of NY Representative Office
Corporate Law, M&A
Tel: (212) 554-3541
Email: [email protected]
Pierre Beissel
Partner
Co-head of Private Equity
Tel: + (352) 407878-262
Email: [email protected]