Luxembourg is a small European country with a population of just over 600,000 people. Despite its small size, it is a major player in the investment fund industry, with assets under management (AUM) totaling over €4 trillion. This makes Luxembourg the second largest investment fund center in the world, after the United States.
The Growth of the Investment Fund Industry in Luxembourg
Luxembourg‘s investment fund industry has experienced rapid growth in recent years, thanks in part to its favorable tax regime, highly skilled workforce, and robust regulatory framework. In addition, Luxembourg is a member of the European Union (EU) and has strong ties to other countries in the bloc, which makes it an attractive destination for investment fund managers looking to access the EU market.
Luxembourg‘s investment fund industry is diverse and includes a range of fund types, including traditional mutual funds, hedge funds, private equity funds, and real estate funds. In recent years, there has also been a growing trend towards alternative investment funds, including litigation finance investment funds.
Litigation Finance Investment Funds in Luxembourg
Litigation finance is a relatively new asset class that involves investing in legal disputes in order to fund the costs of litigation. In return, investors receive a share of the proceeds from the litigation if it is successful. This can include damages, settlements, or judgments.
Luxembourg is an attractive destination for litigation finance investment funds due to its strong legal system, which is based on the civil law tradition. This provides a predictable and transparent framework for resolving legal disputes, which is important for investors in litigation finance funds. In addition, Luxembourg has a highly skilled workforce, including lawyers and other professionals who are experienced in this area.
How to Launch a Litigation Finance Investment Fund in Luxembourg
Launching a litigation finance investment fund in Luxembourg requires careful planning and a thorough understanding of the regulatory requirements. In this section, we outline the steps that need to be taken in order to launch a litigation finance investment fund in Luxembourg.
Step 1: Form a Fund Management Company
The first step in launching a litigation finance investment fund in Luxembourg is to form a fund management company. This is the entity that will be responsible for managing the fund and making investment decisions on behalf of the investors.
Step 2: Obtain Approval from the CSSF
The second step is to obtain approval from the Commission de Surveillance du Secteur Financier (CSSF), which is the regulatory authority responsible for supervising the financial sector in Luxembourg. The CSSF will review the fund management company’s business plan, as well as its compliance with applicable laws and regulations, including the EU’s Alternative Investment Fund Managers Directive (AIFMD).
Step 3: Register the Fund with the CSSF
Once the CSSF has approved the fund management company, the next step is to register the fund with the CSSF. This involves providing the CSSF with detailed information about the fund, including its investment strategy, risk management policies, and other important details. Evidently, Luxembourg offers unregulated investment funds that can be use to facilitate the setup of your investment fund in a quicker time frame (Special limited partnership for example).
Step 4: Raise Capital
The final step in launching a litigation finance investment fund in Luxembourg is to raise capital. This can be done by offering shares in the fund to investors, either through a private placement or a public offering.
Launch your Litigation finance in Luxembourg
Luxembourg is a hub for investment funds, including the rapidly growing field of litigation finance investment funds. With its favorable tax regime, highly skilled workforce, and robust regulatory framework, Luxembourg is an attractive destination for investment fund managers looking to launch a litigation finance investment fund.
Damalion experts guide you through the steps to launch your own litigation finance investment fund. Contact us now.
