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When creating a new fund, the first step involves setting up the legal framework and devising a business model for the fund. The correct choice of your marketing and investment strategy is crucial in determining the success of your fund project.

1. Legal framework

Luxembourg law makes provision for an abundance of basic legal conditions if you are a fund initiator. For a corresponding overview, please refer to the following table:

Legal framework Public funds Special funds Risk capital investment company
Part I (UCITS) Part II (FIS) (SICAR)
Target investments Securities (liquid financial assets), alongside derivatives all marketable assets all marketable assets Venture capital firm (private equity)
Risk spreading (simplified) high (5% / 10% / 40%) average(20%) low (30%) none (100%)
Public distribution simplified limited not possible not possible
Investors private & institutional private & institutional Experienced investors (private & institutional) Experienced investors (private & institutional)

2. Business model

Once we have found the suitable legal framework together with you, the next step is to decide on the business model. Here you can choose among the following types:

Fonds commun de placement ("FCP")

Many initiators choose the FCP legal form which is comparable with the German Government's Special Fund. Since such special funds are legally dependant, they must be administered by a management company which must fulfil certain basic requirements regarding personnel, capital base, own capital and risk management.

Société d´investissement à capital variable ("SICAV") and Société d´investissement à capital fixe ("SICAF")

As an alternative to special funds, your fund can also be established under the legal form of an open-end investment company (SICAV) or closed-end investment company (SICAF). In this case, your customers are shareholders of the fund (investment company) with respective voting rights. The object of the investment company is the administration of the fund and/or company assets in accordance with the principle of risk diversification.

Since SICAVs and SICAFs have their own legal personality, these business models may either take the form of a self-administered or externally-administered investment company. In the latter case, the administration of the company can be delegated to IPConcept, which will relieve you of daily tasks and provide the basic requirements.

3. Management company IPConcept as a management company

Our subsidiary, IPConcept , is a private label management company that is unparalleled in terms of size and quality. Just ask our customers!

Establishing your own management company

Are you an initiator who is setting up a broad range of products and in doing so would like to remain legally independent? We will gladly assist you with the setting up of your management company, as we have done with many of our customers, by providing the services of IPConcept, a first-class outsourcing partner.

4. Your fund project

The answers to the many questions regarding the ideal combination of these different types depend on the goal of your fund project. The fund structure as umbrella funds, multi-manager funds in combination with different share categories allows additional possibilities to individualize your fund project.

We would be happy to discuss the particular details of your project and choose together with you the legal components for your fund project.

Luxembourg offers a suitable framework for every project. Let us create yours together with you!

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