The key takeaway: Luxembourg is adopting AIFMD II “as is”, without adding extra national burdens (“no gold-plating”). For AIFMs, this provides certainty and keeps Luxembourg attractive as Europe’s hub for alternative funds.

Authorised AIFMs have always been able to:

• Manage individual portfolios under mandate (discretionary portfolio management) in addition to managing AIFs.
• Under AIFMD II, the list of additional services expands further. Luxembourg AIFMs may now also:
  • Administer benchmarks (but not those used by their own AIFs).
  • Provide credit servicing under the EU Credit Servicers Directive (2021/2167), continue ancillary services such as investment advice, safekeeping of fund units, and order transmission.

This broadened scope allows AIFMs to capture new business opportunities, particularly in private credit and related services.

Delegation is one of the most closely watched areas of AIFMD II. The Directive strengthens requirements around:

• documenting and justifying delegation structures and reporting; and
• ensuring that an AIFM retains sufficient resources and cannot be reduced to a letter-box entity.

For Luxembourg AIFMs, this is not new.

The CSSF has long required that AIFMs demonstrate real substance in Luxembourg, with sufficient staff, senior management, and oversight functions. The draft bill essentially codifies EU rules that Luxembourg was already applying in practice, meaning there is no additional burden for local managers.

Luxembourg clarification reflects the AIFMD:

• Distribution by MiFID II firms or insurers under IDD, acting on their own behalf, is not treated as delegation.
• This distinction provides certainty for AIFMs relying on third-party distribution channels.

AIFMD II introduces an EU-wide regime for loan-originating AIFs, and Luxembourg has adopted it without additional burdens.

Core requirements:

• Borrower limits: No loans to the AIFM, its staff, depositary, delegates, or group companies (unless at arm’s length).
• Consumer carve-out: No loans to natural persons (consumers) under Luxembourg law.
• Concentration: Max 20 per cent of AIF capital per borrower (except financial institutions that on-lend).
• Retention: AIFs must retain 5 per cent of loans originated and sold.
• Leverage caps: 175 per cent of NAV (open-ended AIFs) and 300 per cent of NAV (closed-ended AIFs).
• Policies: Robust credit assessment, monitoring, and default management procedures are required.

Transitional period:

• Existing loan funds: 5 years from entry into force to comply.
• New loan funds: must comply immediately.

Luxembourg is Europe’s top centre for private credit funds. By transposing AIFMD II on a one-to-one basis, Luxembourg avoids creating additional hurdles.

On delegation and substance, Luxembourg AIFMs are already operating under these standards, so no change in practice is required. The only specific national carve-out is the explicit ban on consumer lending, aligned with Luxembourg commercial and consumer law.

Bill of Law no. 8628 can be found here (only in French)