As Luxembourg’s parliament has passed Bill 8183, to improve and modernise the Luxembourg toolbox for investment funds, Bite Investments’ Head of Fund Investments, Anna Barath, speaks to Citywire Selector on what the new legal framework means for investors and fund managers alike.
Passing of Bill 8183 paves the way for lower investment thresholds, longer fundraising periods and lower taxes on Lux-based funds.
Luxembourg’s parliament has passed a bill that paves the way for a refreshed legal framework for its alternative investment funds.
Bill 8183 is designed to introduce reforms to improve access for retail investors, including:
- clarifying the definition of a ‘well-informed investor’ and lowering the minimum investment threshold for alternative funds from €125,000 to €100,000;
- extending the minimum period of time for funds to reach their minimum level of capital from 12 to 24 months;
- lightening of regulation and broadening of eligible corporate structures; and
- modernisation of the subscription tax regime for Eltifs and Pan-European Pension Product funds.
Silke Bernard, global head of investment funds at Linklaters, said the new regime would provide a boost for Eltifs (European Long Term Investment funds) based in the funds’ hub. ‘The exemption of all Luxembourg Eltifs from subscription tax is excellent news,’ she said.
‘This, together with some other amendments under the new rulebook will make the Luxembourg Eltif framework even more attractive. I am confident Luxembourg will maintain its position as a clear “go-to” domicile for Eltifs.’
Earlier this year, the European parliament confirmed changes to make Eltifs more retail investor-friendly are due to come into effect in January 2024.
Anna Barath, head of fund investments at Bite Investments, said the amendments to Bill 8183 would make help alts fund managers attract ‘sophisticated wealth management clients’ and speed up the ‘democratisation’ of private markets.
‘On the back of already increasing interest in private markets, the latest revision in the LuxCo toolkit is expected to further drive non-institutional investors’ interest in the asset class, particularly as size and classification barriers are once more reduced,’ she said.
‘We expect to see the number of semi-liquid funds launched in Luxembourg going up as a result of this amendment. It could become an increasingly dominant fund structure in certain alternatives asset classes in the years to come.’
Source: Citywire Selector