This episode is also available as a blog post: https://10leaves.ae/publications/luxembourg/special-limited-partnership-in-luxembourg
What is a Special Limited Partnership, or Luxembourg SLP?
The SLP is an unregulated Alternative Investment Fund, that can be incorporated in Luxembourg by:
one General Partner (GP) – the fund manager; and
one Limited Partner (LP) – the investor
The Luxembourg SLP structure has been modelled on partnerships that can be setup in other jurisdictions such as United States, United Kingdom and the Cayman Islands. Their strategies are usually illiquid, and typical investments are made in real estate, PE or the debt markets. However, there are no restrictions on the asset classes, or on the fund strategies.
A Limited Partnership Agreement governs the functioning of the SLP and gives the fund the contractual flexibility to organise the fund structure. An SLP is not restricted to any asset class, nor is it subject to risk diversification rules.
There are more than 2,600 SLPs that were set up in Luxembourg between 2016 and 2019.
Who manages a Luxembourg SLP?
The Luxembourg SLP appoints a General Partner, usually a private limited company also established in Luxembourg, to manage and monitor the fund on behalf of the investors, or Limited Partners. A GP has unlimited liability for all obligations of the Luxembourg SLP, and hence it is usually a distinct legal entity.
