Structuring a Luxembourg GP/LP Fund with FCA Support

GP/LP Fund Structure – Simple Overview

Principals of an investment firm can set up a private equity fund using a General Partner (GP) / Limited Partner (LP) model.

• The GP manages the fund and makes investment decisions. It typically contributes a small amount of capital and receives a share of the fund's profits (called carried interest). In most structures, the GP does not receive management fees directly.

• The LPs are investors (e.g. professional or qualified investors) who provide the majority of capital. They are passive, not involved in management, and their liability is limited to their investment.

This structure is commonly used because it protects investors (limited liability), aligns interests with the GP, and is familiar to institutional investors.

Luxembourg SCSp – A GP/LP Fund Vehicle

The Special Limited Partnership (SCSp) in Luxembourg mirrors the Anglo-Saxon GP/LP model. It is contract-based, tax transparent, and flexible. It can be set up quickly and is not a legal entity, so most of the rules are governed by the Limited Partnership Agreement (LPA).

Regulation – When Is Authorisation Required?

Fund regulation in Europe is governed by the Alternative Investment Fund Managers Directive (AIFMD). The level of regulation depends on the size of the fund:

• Sub-threshold: If assets are under €100 million (with leverage) or €500 million (unleveraged and closed for 5+ years), the GP can register as a sub-threshold AIFM. This involves basic notification to the regulator and no marketing passport. Ideal for small or one-off deals.

• Above threshold: If these thresholds are exceeded, the fund must appoint an authorised AIFM. This brings full AIFMD compliance but also allows marketing to investors across the EU.

A Luxembourg-based fund can use either:

• A standalone SCSp managed by a sub-threshold GP (no approval needed)

• A RAIF (Reserved Alternative Investment Fund) SCSp with an external authorised AIFM (light-touch setup with fast launch)

FCA-Regulated Advisory Firm – Why It Matters

Key challenges for many funds are conducting activities in the UK / engaging with UK investors and extracting fees from the GP/LP structure to support their operations. Our FCA-authorised firm solves this by allowing the fund’s team (or their vehicle) to act as an Appointed Representative (AR) under our supervision.

• Benefits of the AR Structure:Enables the principals to legally advise on investments, arrange deals, and market the fund to UK investors

• Provides FCA oversight without needing direct authorisation (which is expensive and time-consuming)

• Onboarding can take just 6–8 weeks, far faster than obtaining authorization

• Supports reverse solicitation for non-UK investors (investors who approach the firm of their own accord)

• Allows GP to extract fee income to support their business operations in a fully compliant manner

Commercial Benefit: In most GP/LP structures, the GP is not permitted to charge management fees. However, the Appointed Representative can contract with the GP or fund to provide investment advisory services and charge fees for doing so. This allows the principals to extract fee income to support their business operations in a fully compliant manner.

Setup Costs and Timelines

Structure Type	Setup Cost Estimate	Annual Ongoing Costs	Regulatory Notes
Sub-threshold SCSp	€20,000 – €50,000	€20,000 – €40,000	No AIFM or depositary required
RAIF SCSp (external AIFM)	€60,000 – €160,000	€100,000 – €200,000	Authorised AIFM and depositary required
Fully Regulated Standalone Fund	€100,000 – €250,000+	€150,000 – €300,000+	Own AIFM license and infrastructure required
EAG FCA Regulatory Cover	Contact Us	Contact Us	Covers UK advisory/arranging deals/marketing via AR regime

Timelines range from 2–4 weeks for a sub-threshold SCSp, to 4–6 weeks for a RAIF, depending on speed of documentation and service provider onboarding. Fully regulated standalone structures (own AIFM) typically take 3–6+ months due to regulatory authorisation process.

Why Partner With Expert Analysis Group?

By working with EAG:

• Luxembourg platforms can offer UK regulatory coverage to their clients

• Clients can legally approach UK investors

• Reverse solicitation can still be used for non-UK investors

• The fund can operate with clear compliance and flexibility in both the UK and EU

• Allows GP to extract fee income to support their business operations in a fully compliant manner

This model is efficient, scalable, and legally robust.

Expert Analysis Group is an FCA-authorised principal firm providing Appointed Representative services. Learn more about how we can help your firm or contact us to discuss your requirements.