Luxembourg Fund Finance
Luxembourg has developed into the second largest fund centre in the world. This success has been driven mainly by Luxembourg's positioning as the leading jurisdiction for retail funds and undertakings for collective investment. A second pillar of funds has been developing markedly, namely investment funds focusing on so-called alternative asset classes, including private equity, real estate/infrastructure and debt, dedicated to a sophisticated and/or institutional/professional investor base.
Concurrently with the surge in the alternative investment funds market, Luxembourg has seen a significant development in fund financing activity, supported by the possibility of implementing efficient security packages in the context of credit facilities for funds. While capital call subscription credit facilities and bridge facilities are still used and continue their steady growth, permanent leverage facilities have become increasingly popular.
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