Bill No. 8814: SCSs and SCSps qualifying as AIFs will now be able to adopt a multi-compartment structure

CONTEXT

On 30 July 2026, Gilles Roth, Minister of Finance, submitted Bill No. 8814 amending the Law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”).

The proposed reform introduces a new Article 28bis allowing common limited partnerships (sociétés en commandite simple – “SCSs”) and special limited partnerships (sociétés en commandite spéciale – “SCSps”) qualifying as alternative investment funds (“AIFs”) to be structured with multiple compartments.

The objective is clear: to modernise Luxembourg’s fund structuring toolbox and strengthen the Grand Duchy’s competitiveness, particularly for parallel structures and co-investment vehicles.

Here are the key points to note.

A targeted reform of the AIFM Law

The Bill does not amend Luxembourg company law, but introduces a new Article 28bis into Chapter 5 of the AIFM Law.

It addresses a structural gap: until now, statutory compartments were only available under regulated product regimes such as SICARs, SIFs, RAIFs and Part II UCIs.

Going forward, an SCS or SCSp qualifying as an AIF and not subject to a specific “product law” will be able to benefit from the legal segregation of assets and liabilities between compartments.

Strict eligibility requirements

The regime will only be available to SCSs and SCSps qualifying as AIFs within the meaning of the AIFM Law and managed either by an AIFM established in Luxembourg and authorised under the AIFM Law, or by an AIFM established in another EU Member State and authorised under Directive 2011/61/EU.

Vehicles already governed by a specific “product law” (Part II UCIs, SIFs, SICARs and RAIFs) will remain subject to their respective specific rules, which will continue to prevail.

This limitation ensures that the new framework does not create unfair competition with existing regimes while offering unprecedented flexibility to unregulated structures.

Constitutive documents at the heart of the framework

The possibility of creating compartments and the rules governing their operation must be expressly provided for in the constitutive documents of the SCS or SCSp.

The specific investment policy of each compartment must be described in accordance with Article 21 of the AIFM Law.

Careful drafting of the constitutive documents will therefore be essential, as the statutory segregation is not absolute: the constitutive documents may provide otherwise.

Segregation of assets and investor protection

Each compartment constitutes a separate pool of assets. By default, the rights of investors and creditors relating to a compartment are limited to the assets of that compartment, unless otherwise provided in the constitutive documents.

The assets of a compartment may only be used to satisfy claims relating to that compartment, unless the constitutive documents provide otherwise.

As between investors, each compartment is treated as a separate entity. This is one of the key legal innovations introduced by the reform.

Separate liquidation and cross-investments

Each compartment of an AIF referred to in paragraph 1 may be liquidated separately without such liquidation resulting in the liquidation of another compartment. Only the liquidation of the last remaining compartment will result in the liquidation of the AIF.

Cross-investments between compartments will be permitted, provided that the target compartment does not in turn invest in the compartment investing in that target compartment. Any voting rights attached to the relevant partnership interests must also be suspended for as long as they are held by the compartment concerned, without prejudice to appropriate treatment in the accounts and periodic reports.

Practical implications for structuring

The reform significantly broadens the structuring possibilities available for co-investment vehicles, parallel funds and continuation funds within a single legal entity.

Sponsors will no longer need to rely on a product regime — and its related diversification or minimum capital requirements — solely in order to benefit from statutory segregation.

Parallel structures replicating foreign vehicles will be able to mirror them more closely on a compartment-by-compartment basis.

Emerging managers and family investment platforms may also find this framework particularly well suited to building scalable structures without over-engineering their initial set-up.

A strategic development for Luxembourg

Bill No. 8814 does not create a new fund product. Instead, it separates the umbrella functionality from the product-law framework to which it has historically been tied.

This modernisation once again positions Luxembourg at the forefront of private fund structuring in Europe.

 

➡️ For any questions, please contact Nicolas Bernardy or Sébastien Rimlinger.