Four years after the introduction of the law on the Investment Company in Risk Capital (the “SICAR Law”) and the creation of more than 200 SICARs, the Luxembourg legislator has amended the SICAR Law so as to even more efficiently address the specific needs of risk capital fund structures.
The amended SICAR Law will bring the following improvements:
1 Multiple investment compartments
The assets of a SICAR may be segregated and multiple investment policies pursued through the creation of compartments without impairing the use of a single SICAR structure.
The specific investment policy of each compartment must be described in the prospectus. The shares of each compartment may be of different par value or of no par value at all.
The rights of the investors and the creditors of a compartment will be limited to the assets of such compartment, unless otherwise provided in the SICAR’s constitutive documents.
Each compartment may be liquidated separately without affecting the continued existence of the SICAR.
2 Greater flexibility for SICARs organised under the form of a partnership
SICARs organised under the form of a limited partnership (socit en commandite simple) may opt for a variable capital.
No public disclosure of limited partners or their commitments in this type of SICAR will be required anymore.
This amendment contributes to creating an interesting, tax transparent fund structure for risk capital investments.
3 Broadened scope of eligible investors
The managers of a SICAR as well as any other persons who are involved in the management of a SICAR will not have to comply with the “well informed investor” status anymore.
This exemption will be of particular interest to the individuals forming the SICAR’s management team who extract their carried interest through a direct participation in the SICAR.
4 Easement of minimum capital requirements
Contributions in the form of share premium will be taken into account in the calculation of the minimum capital requirement of EUR 1,000,000.
5 Valuation method
The assets of the SICAR must be valued at their fair market value. The actual fair market valuation methods used by the SICAR will be specified in its constitutive documents.
The SICAR will not be required anymore to produce semi-annual net asset value (NAV) calculations.
6 Custodian
The duties of the custodian have been re-defined to only comprise a general duty of safekeeping of the SICAR’s assets.
D.C.