Alternative Investment Funds

By “alternative funds” is meant all investment funds that are not UCITS. This includes hedge funds, funds of hedge funds, venture capital and private equity funds and real estate funds.

There are no legal restrictions on the type of assets in which alternative funds may invest, but the investment policy must be approved by the financial sector regulator, the CSSF.

The regulator has established requirements regarding risk diversification, but these are less strict than for UCITS.

These vehicles can structured either as a “stand alone” fund with a single portfolio investment, or as a multiple compartment fund which, within a single legal entity, creates separate sub-funds (compartments) with different investment policies.

Each legal entity and each fund compartment can issue an unlimited number of share classes based on the needs of the specific clients to whom the shares must be sold.

Luxembourg alternative investment funds are supervised by the CSSF.