Debt funds play an increasingly important role in addressing the imbalance in liquidity supply/demand and helping businesses raise capital and stimulating economic growth. Regulators and policy makers in Europe are becoming aware of the benefits of non-bank intermediation and especially debt funds as they provide an alternative to the banking industry in proposing to the real economy a different source of financing with little maturity transformation and limited leverage.
Over more than two decades Luxembourg has offered an unparalleled breadth of solutions for debt funds, including for debt origination and direct lending funds.
Located at the heart of Europe, Luxembourg is ideally positioned to help global debt funds deal with the complexity of European financial market rules and regulations (incl. distribution, banking regulations).
Luxembourg is the ideal platform for pan-European and global marketing, with a proven track record in cross-border distribution.
All types of debt strategies are accommodated and have been successfully operating out of Luxembourg for a number of years, including: origination, secondaries, mezzanine, distressed, various debt instruments, etc.
Open-ended, semi open-ended and closed-ended debt funds may all be structured using a variety of Luxembourg legal forms and regulatory regimes.
Ireland was one of the first EU member states to introduce a specific regulatory framework for loan originating investment funds. The Central Bank of Ireland (the Central Bank) took a leadership position on loan origination, first consulting on the topic in 2013, before publishing a dedicated loan origination framework in 2014. Recent enhancements to this regime make loan origination funds even more attractive for promoters, managers and, most importantly, investors. The Irish loan originating qualifying investor AIF (L-QIAIF) is an ideal structure to meet both the requirements of the direct lender and institutional investor alike. One of the key advantages of establishing as an Irish L-QIAIF is the clarity, certainty and efficiency of the regulatory regime. Ireland’s regulatory regime has proven to be an attractive domicile for investment funds and with recent practical changes to the rules governing L-QIAIFs, this environment looks set to encourage promoters and managers to use Ireland as the domicile of choice for regulated loan originating funds.