Luxembourg: Updating the SICAR

SUPPLEMENT - PRIVATE EQUITY AND VENTURE CAPITAL REVIEW (OCTOBER 2008) - October 01, 2008

After more than four successful years following its enactment, the law of June 15, 2004 relating to investment company in risk capital (SICAR) is being modernised to fit industry needs and thereby further benefiting its operational flexibility. The proposed modernisation aims to, among other things, increase the attractiveness of the Luxembourg limited partnership (société en commandite simple or SCS) for risk capital structuring purposes.

The Luxembourg legislature is following a two-fold approach for SCSs, largely based on comments from practitioners and inspired by the needs of the private equity industry. It aims to allow an SCS to also opt for a variable share capital structure, as well as to replicate Anglo-Saxon financing techniques for partnerships.

A flexible tool The proposed amendments will align the SCS with the other available corporate structures, so as to allow a SCS organised as a SICAR to have a variable share capital (to...



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