Through an EU retail offering, USFM increase their fee-generating Assets under Management (AuM), diversify their revenue streams, and maintain pools of capital available for purposes, such as co-investing alongside their closed-ended products. In the EU, the term “retail” encompasses any investor which is not an institution of a sizeable corporate. (Ultra‑)High‑Net‑Worth Individuals ((U)HNWIs) qualify by default as retail investors. The retail concept is thus not contingent on tickets size, wealth or experience in the financial sector. 

The Luxembourg default regulated fund product used to tap into the retail market is the Part 2 Undertaking for Collective Investment (UCI). A Part 2 UCI accommodates a broad range of investment strategies, can onboard (EU) retail investors, and is straightforward to distribute to EU and non-EU retail clients. 

Certain key concepts relevant in the context of the authorisation process of a Part 2 UCI fund are not defined by law, instead they have crystallised over the years under informal CSSF practice. In December 2025, the CSSF has provided guidance that streamlines the authorisation process and enhances flexibility. Derogations may apply on a case-by-case basis. 

The guidance clarifies that Part 2 UCIs targeting retail investors cannot invest more than 25% of their assets or commitments in a single asset. To accommodate feeder-type Part 2 UCIs, the 25% threshold is considered met if comparable risk-spreading rules (either by law or contractually) are imposed on the master fund. For infrastructure assets (greenfield, brownfield and secondary), the cap is set at 50%, justified by the typical size of these assets and their relatively moderate risk profiles.

In assessing the above thresholds, intermediary vehicles, such as blockers, holding vehicles, or vehicles established for co-investors, are looked through. The ramp-up to meet the investment limits is by default maximum 4 years and must always be reasonable and aligned to the investment policy. Instead of the 25% and 50% caps, 50% and 70% caps apply if the Part 2 UCI markets to “well-informed” investors. This broadly encompasses, professional investors and investors that commit at least EUR 100,000 or pass a fitness test. 

A Part 2 UCI marketed to investors that are not well-informed can leverage their total exposure up to 70% (which equals an exposure cap of 333% of net asset value (NAV)), no such cap applies if the Part 2 UCI is exclusively distributed to well-informed investors. However, by law, open-ended loan origination funds may leverage their total exposure up to 43% (which equals an exposure cap of 175% of NAV).

The CSSF rules do not disrupt market practices or the usual economic terms of Part 2 UCI funds. Instead, it makes the Part 2 UCI product even more appealing.

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