Multi-Compartment Structures for Unregulated Luxembourg SCSp / SCS AIFs
On 30 July 2026, Bill of Law n° 8814 (“Bill of Law”) was introduced to the Luxembourg Parliament with a view to amending the law of 12 July 2013 on alternative investment fund managers, as amended (“AIFM Law”).
- Published
- in Analysis & Insights
If approved, alternative investment funds (“AIFs”) established in the form of a common limited partnership (société en commandite simple, “SCS”) or a special limited partnership (société en commandite spéciale, “SCSp”) and, in each case, managed by an EU-authorised alternative investment fund manager (“AIFM”) would, for the first time, be permitted to adopt a multi-compartment (i.e. umbrella) structure without being subject to one of Luxembourg’s product regimes.
Background
At present, the ability to create umbrella funds comprising one or more compartments is reserved to investment funds established under one of Luxembourg’s product regimes, i.e. the law of 17 December 2010 relating to undertakings for collective investment, as amended, the law of 13 February 2007 relating to specialised investment funds, as amended, the law of 15 June 2004 relating to the investment company in risk capital, as amended, and the law of 23 July 2016 on reserved alternative investment funds, as amended (“RAIF Law”). Each of these regimes provides for the segregation of assets and liabilities between compartments, such that each compartment is responsible only for its own debts and liabilities, unless the constitutional document of the relevant umbrella fund provides otherwise.
As a result, fund managers seeking the maximum contractual flexibility afforded by an unregulated SCS or SCSp, while avoiding the additional regulatory obligations associated with a product regime, particularly in the private equity, infrastructure, real estate and private debt sectors, have been unable to benefit from umbrella structures.
The Proposed Amendment
The Bill of Law addresses this gap by introducing a new article 28bis (“FIA à compartiments multiples”1 into chapter 5 of the AIFM Law. The new article is modelled on article 49 of the RAIF Law. Its key features are as follows:
Scope of Application: Unregulated Luxembourg AIFs established in the form of an SCS or SCSp and managed by an EU-authorised AIFM (“Luxembourg AIF”).
Constitutional Document: The constitutional document of the Luxembourg AIF (i.e. the limited partnership agreement) must expressly provide for the creation of compartments and set out the rules applicable to each compartment. The specific investment policy of each compartment must be disclosed to investors in the relevant compartment in accordance with article 21 of the AIFM Law.
Asset Segregation: Consistent with the position under the product regimes, the Bill of Law provides for full legal segregation of assets and liabilities between compartments. The rights of investors and creditors in respect of a given compartment would be limited to the assets of that compartment, unless the constitutional document provides otherwise.
Liquidation: Each compartment may be liquidated separately without causing the liquidation of any other compartment. The liquidation of the last remaining compartment will result in the liquidation of the Luxembourg AIF itself.
Cross-investment between Compartments: A compartment of a Luxembourg AIF may, subject to certain conditions, invest in one or more other compartments of the same Luxembourg AIF.
Annual Report: In addition to the annual report prepared for the umbrella Luxembourg AIF as a whole, a separate annual report may be prepared for each compartment, provided that each such report includes the financial information specific to that compartment and, in addition, presents segregated data for all compartments.
Legislative Process and Timeline
The Bill of Law will follow the standard legislative process, including review by the relevant parliamentary committee(s) and the Conseil d’État. It may be subject to amendments during this process. We will continue to monitor its progress and provide further updates as it advances through the parliamentary stages.
Conclusion
The Bill of Law, if adopted, would represent a significant and welcome development for the Luxembourg funds industry. By enabling an unregulated Luxembourg SCSp / SCS that qualifies as an AIF, is not subject to one of Luxembourg’s product regimes and is managed by an EU-authorised AIFM to establish umbrella structures with ring-fenced compartments, the proposed amendment would materially enhance their attractiveness as investment vehicles and bring them more closely in line with the structuring options available under the existing product frameworks.
If you would like further information, wish to discuss the implications of this development in more detail or require assistance with any structuring considerations, please liaise with any of the contacts on this page or your usual Maples Group contact.
1 Multi-compartment AIFs (English translation provided for convenience only)
