What are the trends of the Luxembourg fund finance market for 2020?
Get a comprehensive review of the main trends and developments of the fund finance industry in Luxembourg.
Luxembourg continues to strengthen its ranking as the world’s second-largest fund domicile after the United States: in 2017, the assets under management of Luxembourg-domiciled funds crossed the bar of EUR 4 trillion for the first time, and stand at EUR 4.5 trillion as at 31 August 2019. This increase is not only based on the growth of traditional Luxembourg-domiciled undertakings for collective investment in transferable securities (UCITS) funds, but also due to the continued strong growth in respect of alternative investment funds, including private equity, real estate, infrastructure and debt.
Concurrently with the surge in the alternative investment funds market, Luxembourg has seen a significant development in fund finance activity, supported by the possibility of implementing efficient security packages in the context of credit facilities for funds. Recent years have been particularly active as regards fund finance transactions in Luxembourg, with positive growth, strong credit performance and absence of credit defaults. While capital call subscription credit facilities and bridge facilities are still used and continue their steady growth, permanent leverage facilities have become increasingly popular.
This overview published in Global Legal Insights to: Fund Finance 2020 - Luxembourg, presents the key legal aspects of fund finance related to the leverage under the AIFMD and the AIFM law, the structuring of a security package and the involvement of depositaries in the transactions.
VassiliyanZanevPartner Attorney at Law / Avocat à la Cour
Vassiliyan Zanev, partner, is a member of the Banking & Finance Practice Group in our Luxembourg office. He focuses on fund finance, securitisation, debt issuances and real estate finance.T: +352 466 230 257 M: +352 691 963 090 E: firstname.lastname@example.org
MarcMeyersPartner Attorney at Law / Avocat à la Cour
Marc Meyers, partner, heads the Investment Management Practice Group in our Luxembourg office. He focuses on the structuring and regulatory work for Luxembourg alternative investment fund structures.T: +352 466 230 306 E: email@example.com
AntoineFortier GrethenLocal Partner Attorney at law / Avocat à la Cour
Antoine Fortier Grethen, local partner, is a member of the Banking & Finance practice group in our Luxembourg office. He focuses on secured lending, including fund finance transactions.T: +352 466 230 287 E: firstname.lastname@example.org