Herbert Smith Freehills Kramer has advised BNP Paribas Asset Management, a leading global asset manager, on the establishment and launch of an open-ended evergreen Luxembourg reserved alternative investment fund (RAIF). The structure will offer Scottish Widows' customers access to private market investments through a UK feeder open-ended long-term asset fund (LTAF).
The LTAF, designed for the derisking phase of the investment journey of Scottish Widows' customers, will invest into the RAIF, whose strategy is primarily focused on diversified private credit, including infrastructure debt, commercial real estate debt, corporate debt, direct corporate loans, ABS and CLOs. Investments in other private asset classes, including equity-related assets such as infrastructure, private equity and real estate, will be made on an ancillary basis.
The transaction required sophisticated coordination between the AIFMD regime applicable at the level of the RAIF and the UK regulatory framework governing LTAFs. This included navigating specific rules on eligible investors, liquidity management mechanisms, valuation requirements, and detailed disclosure obligations unique to the LTAF regime. Herbert Smith Freehills Kramer advised on all aspects of the structuring, including Luxembourg fund formation, regulatory and tax.
This innovative cross‑border structure required close collaboration between Herbert Smith Freehills Kramer Luxembourg and UK teams, including tax and funds practices which was led by Joanna Pecenik Vergès d'Espagne (Partner Luxembourg/Paris, Investment Funds), supported by senior associate Nicolas Haas (Luxembourg, Investment Funds) and associate Thomas Crahay (Luxembourg, Investment Funds), Partner Jean-Dominique Morelli (Luxembourg, Tax), Partner Krishna Shorewala (London, Investment Funds), and Partner Casey Dalton (London, Tax).
Joanna Pecenik said: "This transaction demonstrates the growing convergence between Luxembourg alternative fund vehicles and the evolving UK fund landscape. The establishment of a RAIF alongside an LTAF feeder is a strong example of how asset managers are seeking flexible, cross‑jurisdictional fund solutions that meet the needs of long‑term institutional investors. We are proud to have supported BNP Paribas Asset Management on this forward‑looking initiative".
This mandate further strengthens Herbert Smith Freehills Kramer's Luxembourg investment funds practice, which has recently advised on a number of alternative fund launches and cross‑border structuring projects across private equity, credit, infrastructure, and real assets.