Global Legal Insight - Fund Finance 2017 - Luxembourg Chapter
Luxembourg has developed into the second-largest fund centre in the world, with EUR 3,957 billion of assets under management. This volume has been driven mainly by Luxembourg’s success in positioning itself as the leading jurisdiction for undertakings for collective in transferable securities (UCITS). In recent years, 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. The recent years have been particularly active as regards to fund financing transactions in Luxembourg, with positive growth and strong credit performance. While capital call subscription credit facilities and bridge facilities are still used and continue their steady growth, permanent leverage facilities have become increasingly popular.