- More than 600 new Raifs, sub-Raifs launched in 2023
- Carne, Pictet and Partners emerge as most active AIFMs
- AIF identifier data from CSSF and LBR underpins analysis
Raifs - Reserved Alternative Investment Funds - have been one of the most successful investment vehicles for Luxembourg. Part of their appeal has been their utility in launching sub-funds to form an umbrella structure. This has led, according to data analysis by Investment Officer Luxembourg, to it becoming very popular to launch sub-funds under existing Raifs.
2023 saw over 600 Luxembourg Raifs and sub-funds added to Luxembourg financial regulator CSSF’s master record of alternative investment funds. The analysis also revealed that nearly 1,000 Raif sub-funds have been registered since 2016.
This emerges from analysing and comparing two public data sources on Raif registrations. The analysis looked at the 27 March CSSF AIF identifiers data and the more up-to-date 15 March Luxembourg Business Registers (LBR) Raif registration data.
New Raif registrations in Luxembourg
The CSSF data for 2023 and early 2024 showed Ireland-based Carne Global registered the highest number - 53 - active Raifs or sub-funds. Swiss-based Pictet Asset Management had 33 in the same period. Third place Swiss firm Partners Group had 27.
Slower growth for ‘master’ Raifs
The level of interest in setting up sub-funds instead of new ‘master’ Raifs is mirrored in their slowdown in recent years. The LBR data - containing records of 2,570 Raifs - revealed this dropped during February 2024, with only 20 new top-level Raifs.
This was down from 32 in January and 41 in December 2023.
The AIFM with the most Raifs, not including sub-funds, in the same period, is the Switzerland-based Partners Group, with 25. Dublin-based Carne Global comes in second with 17, and Waystone Management Company, also based in Ireland, is third with 16.
Sub-fund data changes view
The story of Raifs in CSSF’s AIF Identifier dataset is different. Investment Officer’s analysis shows 613 new funds with “raif” in their fund names during 2023, either as Raifs or sub-funds, along with 111 so far in 2024.
These investment funds take advantage of the Raif investment vehicle’s ability to add sub-funds to, for example, address different investment strategies.
Given that 368 new Raifs were created, (61 so far this year) according to the LBR data, this suggests that about 245 Raif sub-funds entered the market during 2023, and, on a preliminary basis, 50 so far in 2024.
Nearly 1,000 Raif sub-funds
The difference between the 2,570 funds listed in the LBR dataset and the 3,468 AIFs with “Raif” in their fund name in the CSSF database supports the assertion that Luxembourg is now the domicile of nearly 1,000 Raif sub-funds, exactly 898. These numbers will continue to increase.
The CSSF dataset records the status of AIFs. The data is complex, with multiple dates and numerous codes with field names that require expert knowledge to interpret.
New AIF inceptions per year:
The CSSF dataset goes back to before the turn of the century and now lists some 15,218 entries.
Extensive research
It is updated daily, with the CSSF having required AIFMs to inform it on an ongoing basis about the creation of new AIFs or their transfer from one AIFM to another.
Investment Officer had to delve deeply into the dataset to better explain what the data represents as well as avoid apparent double counts and improve the analysis.
To manage the complex spreadsheet and extract key insights, Investment Officer relied on structured query language (SQL) software, extensive internet searches, and guidance from AIF experts at the CSSF and the financial industry.
Most recent CSSF data
A count of AIFs or sub-funds with “Raif” in their name shows that in March 2024, there were 26 registered at the time the data was downloaded on 27 March. The CSSF data takes longer to stabilise than the LBR dataset. The data showed 42 such funds for February. Looking as far back as December, there were 74.
Raifs are a Luxembourg investment vehicle with its own “product law” that can be used for a variety of investment strategies
The funds are only available to “well-informed” or institutional investors, unlike the widely used and popular Ucits funds that are structured around more liquid asset classes. Investors must commit at least 125,000 euros on a long-term basis.
Total recent AIF registrations
Looking instead at total AIF registrations by AIFM in the CSSF dataset, Carne Global racked up 117 funds between January 2023 and April 2024. Waystone wound up with 74, with US-based Blackstone Europe Fund Management coming in third with 61.
Financial details about Raif funds, such as assets under management or fundraising targets, are not included in the two Luxembourg datasets. An earlier study of a selection of annual reports issued by Raifs suggests that a typical fund holds about 150 to 200 million euros in assets, ranging from relatively limited assets for Raifs still raising funds to multiple billion euros in assets for well-established Raifs.
Total number of AIFs registered in Luxembourg:
Further reading on Investment Officer Luxembourg:
- LGIM uses Lux Raif umbrella fund to sell unlisted debt
- AIFMs increasingly prefer sub-funds over new Raifs
- Luxembourg Raif market is alive and kicking again