Luxembourg bill to unlock multi-compartment SCS/SCSp AIFs

What the draft bill introduces

A new Article 28bis in the AIFM Law, allowing Luxembourg SCS and SCSp AIFs that are not subject to a Luxembourg product law to be established with multiple Compartments.

• Each Compartment corresponds to a distinct pool of the AIF’s assets. The bill is without prejudice to equivalent Compartment regimes already available under the SICAR, SIF, RAIF and Part II UCI laws, which continue to prevail where applicable.
• The new regime is modelled on Article 49 of the RAIF Law, itself derived from Article 71 of the SIF Law, so the core mechanics should be familiar to the market.

Core legal mechanics

Statutory segregation between Compartments

Article 28bis would introduce legal segregation between Compartments in SCS and SCSp AIFs, in line with Luxembourg product-law regimes. By default, the rights of investors and creditors relating to a Compartment, or arising in connection with the creation, operation or liquidation of a Compartment, are limited to the assets of that Compartment. The assets of a Compartment answer exclusively for the rights of its own investors and creditors, and, as between investors, each Compartment is treated as a separate entity.

This segregation is a default rule and can be disapplied by the constitutive documents. Sponsors and investors should therefore review the limited partnership agreement and related documents carefully to confirm that Compartment segregation, cross-liability safeguards, allocation mechanics and liquidation provisions operate as intended.

Separate liquidation and cross-Compartment investment

Each Compartment may be liquidated separately without triggering the liquidation of the other Compartments. Only the liquidation of the last Compartment results in the liquidation of the AIF itself. The bill also expressly permits one Compartment to subscribe for, acquire or hold interests issued by one or more other Compartments of the same AIF, subject to the terms of the constitutive documents and two statutory guardrails:

• the target Compartment may not in turn invest in the Compartment that has invested in it; and
• any voting rights attached to the relevant interests are suspended for as long as they are held by the investing Compartment, without prejudice to appropriate treatment in the accounts and periodic reports.

Constitutive documents, disclosure and reporting

The constitutive documents must expressly provide for the use of Compartments and the related mechanics. The specific investment policy of each Compartment must be described in accordance with Article 21 of the AIFM Law.

The bill deliberately does not introduce a mandatory issuing or offering document. This preserves the flexibility currently provided by the AIFM Law as to the form and location of investor information. A separate annual report may be prepared for each Compartment, provided it includes, in addition to information on the relevant Compartment, aggregated data for all Compartments, similarly to what is currently possible for RAIFs and SIFs.

Why this is a major development for managers

The practical significance of the bill is substantial. Today, managers seeking legally segregated pools within a Luxembourg SCS or SCSp AIF need to opt for a product-law wrapper, most commonly a RAIF, even where the requirements of that wrapper are not otherwise required for the project. The proposed Article 28bis of the AIFM Law would decouple the Compartment feature from the product-law regimes and make it available directly within the AIFM Law perimeter.

The proposed regime should materially enhance the range of structuring solutions available in Luxembourg for managers seeking to establish an SCS or SCSp AIF with multiple Compartments. This should be particularly valuable in in the context of parallel fund, feeder fund and co-investment arrangements, as well as multi-strategy platforms and Luxembourg vehicles intended to replicate foreign umbrella or series structures, including US-style Series LLC arrangements. In such cases, the Luxembourg vehicle is often required to mirror, on a proportionate basis, the asset allocation, portfolio composition or compartmentalisation mechanics of a corresponding foreign vehicle. The introduction of a statutory Compartment regime should facilitate such replication while providing a clearer and more robust legal framework for achieving segregation of assets and liabilities.

By reducing the need to use a product-law wrapper solely to obtain segregated Compartments, the bill should reduce structuring friction, streamline documentation, limit unnecessary divergence from the non-Luxembourg parallel or master structure, and reinforce Luxembourg’s competitiveness for private funds managed by authorised AIFMs.

Practical implementation points

Open questions and points to watch

• Scope of eligible managers: the bill is limited to AIFs managed by an authorised AIFM established in Luxembourg or another EU Member State. It is not, as drafted, open to third-country managers.
• Disclosure expectations: because no issuing document is mandated, market practice and any future CSSF expectations may be important in determining how Compartment-level investment policies and segregation mechanics are presented to investors.
• Interaction with product-law vehicles: the bill leaves the SICAR, SIF, Part II UCI and RAIF Compartment regimes untouched. Sponsors using one of those regimes solely to obtain Compartments should monitor whether the final law or any guidance addresses transitions, restructurings or coexistence between product-law and non-product-law Compartment platforms.
• AIF qualification remains central: Article 28bis would apply only to vehicles that qualify as AIFs and are managed by an authorised AIFM. The bill does not otherwise change the AIF qualification or AIFM authorisation analysis.

Key takeaways

• This is a pragmatic but significant upgrade to the Luxembourg fund toolbox: it brings a familiar RAIF-style Compartment regime to unregulated SCS/SCSp AIFs without creating a new product law.
• For authorised AIFMs, it should make it easier to launch Luxembourg SCS and SCSp AIF platforms with segregated Compartments for parallel-fund, feeder, co-investment and multi-strategy purposes.
• The mandatory authorised-AIFM condition keeps the structure within the AIFMD framework while avoiding unnecessary product-law obligations where these are not needed for the project.
• Default statutory ring-fencing, combined with contractual flexibility, gives sponsors a strong but adaptable segregation tool, but careful drafting of constitutive documents remains essential.
• The reform is limited to special limited partnerships and common limited partnerships and does not extend to contractual funds (FCPs); managers should factor this scope into vehicle selection.

Next steps

The bill was deposited with the Chamber of Deputies on 30 July 2026 and remains subject to the legislative process, including the opinion of the Conseil d’État, so its terms may still evolve. Sponsors considering Luxembourg SCS or SCSp structures should monitor the bill’s progress and assess whether existing or planned structures could benefit from the proposed Compartment framework once adopted.