Authors Laura Archange and Jad Nader are partners at Ogier in Luxembourg. Email: laura.archange@ogier.com and jad.nader@ogier.com

LP Financing in Luxembourg: what sponsors and lenders need to know

Limited partner (LP) financing has become a growing feature of the Luxembourg fund finance market in recent times offering liquidity and strategic flexibility for asset managers retail and institutional investors including high-net-worth and ultra-high-net-worth individuals.

As a leading funds domicile Luxembourg offers a variety of solutions to meet investor needs. But unlike many fund-level products LP financing involves lending directly or indirectly to limited partners secured over their partnership interests and related rights. Structuring LP finance transactions in Luxembourg presents distinctive legal and commercial considerations for lenders and sponsors.

What is LP financing?

LP financing refers to lending arrangements where the financing is made not to the fund but to the...