Growth in funds registered as Reserved Alternative Investment Funds (Raifs) in Luxembourg has slowed in February and March, according to an analysis of data from the Luxembourg Business Registry by Investment Officer Luxembourg.
The number of new Raifs registered amounted to 33 in February 2022 and 34 in March. This is noticeably down from the rates seen in late 2021. In December, 2021, there were 54 newly registered Raifs, with a year-long average of 37 monthly registrations, increasing to 42 for the last six months of the year.
Some of the new RAIFs launched in February and March were one-offs during the period, with a single management company registering a single Raif. Eight management companies registered the majority of the new funds, with three RAIFs each.
- Alter Domus Management Company S.A.
- ARDIAN France
- Avega Capital Management S.A.
- Fuchs Asset Management S.A.
- Hauck & Aufhauser Fund Services S.A
- Rothschild & Co Investment Managers
- Sanne LIS S.A.
- Waystone Management Company (Lux) S.A.
Bruno Bagnouls, the head of sales and relationship management at Alter Domus, owner of one of the most active management companies, said Luxembourg’s alternative investment market remains convinced of the attractiveness of the RAIF vehicle. “There’s no doubt that the RAIF in Luxembourg is quickly becoming the vehicle of choice for alternative investment fund managers.”
Looking into the RAIFs registered revealed many of the interesting uses to which the RAIF structure is being put.
Energy transition
The Ardian France management company registered a fund named “Ardian Clean Energy Evergreen Fund S.C.A., SICAV-RAIF”. The RAIF is named similarly to the Ardian Clean Energy Evergreen Fund (Aceef), an Article 9 fund which Paris-based investment house Ardian announced earlier this month as first open-ended fund dedicated to the energy transition. Ardian has announced that it is targeting €1 billion for the fund’s first investment cycle and described it as “a permanent, long-term investment platform entirely dedicated to financing clean energy.”
The firm is part of the global Ardian company, which describes itself as “a world-leading private investment house with assets of US$125 billion managed or advised in Europe, the Americas and Asia.” It is majority-owned by its employees.
Ardian also registered two others. One of these: TSH Feeder 2 S.C.S., SICAV-RAIF” is related to a subsidiary that Ardian jointly holds with EDF Invest, the investment branch of French energy giant EDF, named in French “Transport Stockage Hydrocarbures (TSH)”. TSH is the majority shareholder in the leading storage site for liquid hydrocarbons in France and the second largest in Europe.
Nuclear waste disposal
One of the three funds registered by Avega Capital Management is named “Lux Entsorgungsfonds SCSp SICAV-RAIF”. The German term “Entsorgungsfonds” refers to the first and so far the only German sovereign wealth fund, which was set up to finance nuclear waste disposal and has assets under management totalling EUR 24 billion.
Another of Avega’s three funds is “Titanbay Focused Master Fund SCSp SICAV-RAIF”. This RAIF relates to a Luxembourg-registered firm called Titanbay that offers “the preferred private markets investment platform for sophisticated investors, private banks and asset managers.”
Cloud-based enterprise software
One of the three funds listed by Sanne US SA was “DTCP Growth Equity III SCSp SICAV-RAIF”. DTCP turns out to be Deutsche Telekom Capital Partners. In an email, DTCP press officer Melanie Boettcher explained that “DTCP Growth Equity III SCSp SICAV-RAIF invests in cloud-based enterprise software companies that drive digitization and automation.” However this RAIF has not yet been officially marketed. Boettcher explained that this RAIF is the third vehicle of DTCP’s Growth Equity team.
Another of Sanne US SA’s funds was “Erste Private Capital, S.C.A., SICAV-RAIF. Paul Severin, head of communications & digital marketing at Erste Asset Management confirmed the RAIF belonged to his firm, which describes itself as “an international asset management company with a strong position in Central and Eastern Europe.” The firm said its activities are “backed by the financial strength of Vienna, Austria-based Erste Group Bank AG.”
Five Arrows
The three funds registered by Rothschild & Co Investment Managers all had connections with Rothschild’s “Five Arrows” network of companies, with the most high profile being European Five Arrows Principal Investments and North America’s Five Arrows Capital Partners.
Investment Officer Luxembourg has analysed the 134-page Five Arrows filing to the United States Securities and Exchange Commission (SEC). Five Arrows is the primary business name of a firm whose legal name is Rothschild & Co Investment Managers. The SEC document contains individual filings on a total of 23 Five Arrows funds that Five Arrows advises, all of them registered in Luxembourg. They included 8 RAIFs listed with a total current gross asset value (CGAV) of USD1.2 trillion. 14 of the companies are special limited partnerships (SCSp) (CGAV of about USD1.1 trillion), and 1 is a partnership limited by shares (SCA) (USD37,434,205).