REAL LIFE EXAMPLE
A US real estate fund manager secured commitments for one of its strategies from US and other international investors, who were ready to invest in a Channel Islands limited partnership, which had its first close.
During the marketing phase, the sponsor received enquiries from some of the European LPs of the preceeding fund. These LPs indicated that they will require an AIFMD-compliant fund.
The Sponsor approached Royalton Partners to discuss the available structuring options. It appeared that a parallel Luxembourg limited partnership, the SCSp, would be the most convenient option. A Luxembourg law firm drafted the LPA using the Channel Islands documentation as a base, adding AIFMD specific features added. These mainly related to marketing, role of the advisory board and the role of service providers.
The Sponsor held a closing of the Luxembourg SCSp with the re-upping LPs where Royalton Partners has been appointed as the AIFM. The GP also appointed a licensed depositary and the fund administrator, which was Luxembourg subsidiary of the existing Channel Islands service provider.
The Sponsor continued the marketing of the Lux SCSp in Europe based on the marketing passport of Royalton Partners. Subsequently the final closing took place with the additional European LPs.