The world of impact investing is growing rapidly, as more and more people look for ways to make a positive difference in the world while also generating a return on their investment. If you’re interested in launching an impact investment fund, Luxembourg is an attractive option, offering a well-established fund industry and a supportive regulatory environment. Here’s what you need to know to get started.
Introduction to the Impact Industry
The impact investment industry is all about making investments that have a positive impact on people and the planet, while also generating financial returns. This can include investments in renewable energy, sustainable agriculture, affordable housing, and more. The goal is to use investment capital to make a positive change in the world, while also generating returns for investors.
Types of Luxembourg Regulated Investment Funds
In Luxembourg, there are several types of regulated investment funds that you can launch for your impact investment fund. The most common types include:
- UCITS (Undertakings for Collective Investment in Transferable Securities) – This is the most common type of regulated investment fund in Luxembourg. UCITS are open-ended funds that are authorized by the CSSF (Commission de Surveillance du Secteur Financier), and they can be marketed to retail investors across the European Union.
- SIF (Specialized Investment Fund) – This type of fund is also authorized by the CSSF, and it can invest in a wide range of assets, including stocks, bonds, and alternative investments. SIFs can be marketed to professional investors, and they are subject to the same rules as UCITS.
- SICAR (Société d’Investissement en Capital à Risque) – This type of fund is designed for investment in high-risk, high-return projects, such as start-ups and early-stage businesses. SICARs are also authorized by the CSSF, and they can be marketed to professional investors.
Types of Luxembourg Unregulated Investment Funds
In addition to the regulated investment funds mentioned above, there are several types of unregulated investment funds that you can launch for your impact investment fund in Luxembourg. These include:
- RAIF (Reserved Alternative Investment Fund) – This type of fund is a relatively new addition to the Luxembourg investment fund landscape, and it offers a streamlined and flexible alternative to traditional regulated funds. RAIFs are not regulated by the CSSF, but they are subject to oversight by an authorized Alternative Investment Fund Manager (AIFM).
- SLP (Special limited partnership or Société en commandite spéciale) – This type of fund is designed for investment in high-risk, high-return projects, similar to SICARs. SLPs are not regulated by the CSSF, and they are subject to oversight by an authorized AIFM.
- SOPARFI (Société de Participations Financières) – This type of company is used for holding and financing activities, and it can be used as an investment vehicle for impact investing. SOPARFIs are not regulated by the CSSF, but they are subject to corporate income tax in Luxembourg.
- Securitization Vehicle – This type of fund is used for securitizing assets, such as loans or mortgages, and it can be used for impact investing. Securitization vehicles are not regulated by the CSSF, but they are subject to oversight by an authorized AIFM.
- SPF (Société de Gestion de Patrimoine Familial) – This type of company is used for holding and managing wealth, and it can be used as an investment vehicle for impact investing.
Damalion experts are open to guide you in the process to launch your impact investment fund in Luxembourg. Please contact us now.
