RSM LUXEMBOURG LAUNCHES AN AIFM

RSM Luxembourg have created RSM Fund Management Luxembourg, a third-party AIFM (so called “rent-an-AIFM” concept) active in the following areas:

  • Real Estate
  • Private Equity
  • Private Debt

This new service offering will enhance the existing range of activities in Luxembourg, and in particular complement the already existing fund administration activity of RSM Financial Services Luxembourg.

As a fully compliant & licensed entity we offer a turnkey solution for fund managers and advisors running Luxembourg-domiciled AIFs (Alternative Investment Funds), allowing clients to quickly access the Luxembourg investment funds platform or upgrade their existing structures without going through costly and lengthy recruitment and approval processes in addition to reducing additional capital requirements. And last but not least, by using our AIFM services clients can continue to operate in several jurisdictions on a flexible project-by-project basis.

What are the activities of the AIFM?

The AIFM is appointed by client funds to act as management company in accordance with the requirements of the Alternative Investment Fund Managers Directive (AIFMD). More precisely, the AIFM will, under the control and supervision of the client fund boards, perform the following functions:

Portfolio Management

Portfolio management, i.e., the taking of in- and divestment decisions and the monitoring of assets will be performed either on a full delegation (i.e., the AIFM delegates portfolio management to a licensed portfolio manager and retains only a supervisory/control/monitoring function) or advisory basis.

Under the latter model, the AIFM receives investment advice (typically, but not necessarily from companies linked to the fund client) and will itself take in- and divestment decisions, based on information provided by the investment advisor(s) and other external sources.

Risk Management

The AIFM’s risk management function:

  • Establishes and monitors compliance with qualitative and quantitative risk limits as set forth in the fund documents and applicable laws and regulations
  • Establishes, implements and maintains a risk management system
  • Ensures that adequate due diligence is properly performed
  • Provides reporting to the governing bodies of the AIFM and the AIF, the CSSF and other relevant parties

Valuation

The valuation function establishes and maintains policies and procedures to ensure a sound, transparent, comprehensive and appropriately documented valuation processes, in accordance with the valuation principles set forth in the fund documents. It will assess and propose adequate valuation methodologies and supervise the valuation of the fund and the fund shares by the AIF’s fund administrator.

Compliance

The compliance function ensures that the AIFM and the corresponding AIFs are managed, operated and administered in accordance with all applicable laws and regulations. It also monitors that internal policies are complied with and that other service providers to the AIF (notably the Registrar and Transfer Agent and,  where applicable, distributors) maintain procedures and policies to ensure compliance of their respective activities and duties.

The AIFM will be run by Christoph Lanz, previously ExCom member, and Christophe Printz, previously head of the Private Equity & Real Estate, both at Edmond de Rothschild Asset Management (Luxembourg) as Conducting Officers.

About the Luxembourg Fund Centre

With over 4 trillion EUR AuM, Luxembourg is the leading investment fund centre in Europe and second only in the world behind the United States. It is the largest global distribution centre for investment funds, with its funds offered in more than 70 countries around the world, and has established itself over the recent years also as European fund hub of choice for alternative investment fund managers.

The Luxembourg financial centre is solution-driven and provides a complete range of services within a stable and well-regulated environment. And, thanks to a comprehensive and continuously updated toolbox of investment vehicles suited for all types of investments and investors, regardless of whether they come from a civil or common law background, Luxembourg is more often than not the default choice when a purely domestic solution will not do. Luxembourg is AAA-rated by the three major rating agencies and with sovereign debt at 22.1% of GDP, far below the EU average of 85%.

Our AIFM and the RSM Network

With the additional AIFM offering, RSM Luxembourg can not only enhance its service offering to existing and local businesses, but also provide a one-stop shop solution to clients within RSM’s international financial services, private equity and real estate service lines. And due to a changing regulatory, tax and political environment (and notably in the context of Brexit), Luxembourg AIFM solutions are particularly high in demand these days. Conversely, RSM Fund Management Luxembourg will be heavily involved in the clients’s tax structuring, due diligence, valuation and risk management activities, and thus draw upon the network’s expertise in all these areas - the addition of the AIFM to our portfolio of activities can create true win-win’s across multiple business lines and reinforce our common positioning of international service provider of choice.