Launching a Luxembourg SICAV-RAIF for residential assets

Setting up a Luxembourg SICAV-RAIF is not a single legal act but the interlocking of three workstreams that have to run at the same time: fund structure, capital raising and portfolio build-up. If one falls out of step, the others wait. An asset manager had exactly this parallelism steered externally for an Austrian residential portfolio.

Starting position

The asset manager had market access and a pipeline of assets in Austria, but no vehicle through which institutional capital could be raised. For the target investor group a Luxembourg structure was the obvious candidate – regulatorily established, internationally accepted and familiar to cross-border investors.

The difficulty lay in the interplay: investors are reluctant to subscribe to a vehicle without a visible pipeline, vendors are reluctant to negotiate with a buyer without secured funding, and the fund structure has to stand before the two can come together.

The brief

Support across all three workstreams – from structuring through to operational portfolio build-up:

• Developing the fund strategy and designing the SICAV-RAIF against regulatory and tax requirements
• Structuring the fund and holding architecture in coordination with international legal and tax advisers
• Supporting the fundraising process from investor approach to closing
• Accompanying investor onboarding including subscription processes and documentation
• Coordinating the fund launch with the Luxembourg service providers – AIFM, depositary, administrator
• Identifying and supporting acquisition processes for residential assets in Austria
• Steering due diligence and supporting transaction negotiations
• Aligning fund structure, investor requirements and operational asset management

How the launch was run

The structure follows the investor group

The starting point was not the legal form but the question of which investors were to be addressed. Their requirements – on reporting, liquidity, tax treatment and regulatory classification – determine how the vehicle is built. A fund structured before the target group is settled has to be reworked later.

Cross-border coordination as a standing task

Luxembourg fund structure, Austrian assets, German-speaking investors: legal and tax advisers across several jurisdictions had to be brought into one consistent structure. This coordination is the most time-consuming part of such mandates – and the point at which timetables most often break.

Fundraising with a credible pipeline

The investor approach was closely linked to the portfolio build-up. Specific assets under review turn a fund idea into an investment proposition – conversely, secured capital gives the necessary weight in acquisition negotiations.

Why a SICAV-RAIF specifically

The choice fell deliberately on a SICAV-RAIF rather than a directly supervised vehicle. The RAIF is not subject to its own product supervision by the CSSF but is supervised through its appointed AIFM – which shortens the launch period considerably without investors having to forgo a regulated structure. For a first fund this is often the decisive point: an authorisation procedure lasting several months regularly collides with the window in which the asset pipeline remains available.

The SICAV's variable capital structure additionally allows subscriptions across several closings. For the portfolio build-up that is essential: capital is drawn when acquisitions are due, rather than tied up in full from the outset and dragging on returns.

Lead the service providers, do not merely appoint them

AIFM, depositary and administrator work to their own processes and deadlines. The fund launch was therefore actively steered: responsibilities clarified, dependencies made visible, dates tracked. Leaving that coordination to the providers means losing control of your own timetable.

Outcome

Fund structuring, capital raising and portfolio build-up were delivered as an integrated exercise in a cross-border context. The fund was launched, capital raised and investor onboarding completed while the acquisition of the Austrian residential assets ran in parallel.

What sponsors take from this

• The investor group comes before the structure. It determines reporting, tax logic and liquidity profile.
• Cross-border advice needs leadership. No adviser coordinates the others on their own.
• Pipeline and capital depend on each other. Both workstreams have to show progress in parallel.

The profile this mandate requires

What was required was a combination of knowledge of Luxembourg fund structures, experience in institutional fundraising and transaction confidence in the residential market – plus the ability to coordinate international advisers and service providers. Houses launching a first fund generally do not have this profile in-house.

For tasks like this, experienced freelancers are brought in deliberately, often for the duration of the structuring and fundraising phase. The services page shows the fields we cover; our process describes the steps.

Related project stories: interim fund management in a service KVG and a debt-to-equity swap for a pension scheme.