At United, we consider that the recent revision of the EuVECA Regulation and the EuSEF Regulation will push the growth of the Luxembourg's alternative funds (“AIF”) in 2019.

In our daily practice we note that both regimes are relatively unknown to smaller fund initiators and deserve more attention. The regimes provide a solution to one of the key challenges faced by smaller fund initiators: the fragmentation of the legal and regulatory environment in the different fund-raising jurisdictions. Recurrent queries of prospective initiators turn around private placement, reverse solicitation, inherent risks, etc. The revamp of the regimes should increase their visibility but also provides for a clarified and harmonised approach of the local supervision authorities with regard to the interpretation of the terms of the European directive. It is essential that the smaller initiators are continuously supported as they, through their personal network, recurrently manage to source deals laying the grounds for future (hidden) champions.

Another element that we consider having an impact on the AIFs is obviously the continuous uncertainty around Brexit and the bilateral access to the financial markets. Whereas we don’t consider that all fund initiators will flee London and settle in Luxembourg, we strongly believe in building bridges allowing the combination of local fund initiators having access to onshore AIFs that enjoy a highly stable and foreseeable political and regulatory environment.