Luxembourg · The €50k Fund

€50,000

a year. That is what it costs to run a Luxembourg fund. Not the number you were quoted.

The 150k and 200k invoices are real. They were never the price of Luxembourg. They were the price of complexity nobody questioned. Here is what a simple structure actually costs, and why.

See the benchmark → Send me your quote →

Structure1 GP S.à r.l. + 1 SCSp Investors10 LPs Portfolio5 to 10 lines ValuationOne NAV a year Running costAbout €50k p.a.

The story that travels faster than the invoices

"Ask a room of emerging managers why they did not launch in Luxembourg and you will hear the same answer: cost. Somebody was quoted 150k. Somebody else heard 200k."

By the time the story reaches a first-time VC in Singapore or a private debt team in Dubai, Luxembourg has become the jurisdiction you graduate into once you have raised your second fund.

I have spent twenty years inside this industry, in Luxembourg, Singapore and Hong Kong, on the operations side and on the commercial side. I have seen the 200k setups. I have also seen what is inside them.

Most of that cost is not the jurisdiction. It is the structure the sponsor chose, or was sold, on day one.

So we did the exercise. With a select group of providers we work with in Luxembourg, we priced a deliberately simple fund. The answer came in at around €50,000 a year.

The benchmark

What is inside the number. And what is not.

One GP S.à r.l. as general partner. One SCSp as the fund. Five to ten non-complex investment lines: direct stakes, loans, a handful of SPVs. Ten limited partners. One NAV per year. Annual accounts, capital account statements, call and distribution notices, and the filings the vehicle requires.

Inside the €50k a year

Running the fund

Domiciliation and corporate services for the GP and the fund
Fund accounting and the annual NAV
Investor services: register, capital calls, distributions, LP correspondence
Compliance and filing work the structure requires

Outside it

Priced separately, if needed

The auditor, if your LPs require one
The registered AIFM function, which the GP can carry itself at sub-threshold

Setup, one-off

Where sponsors usually get hurt

Structuring advice, LPA drafting, incorporation and notarial fees. Quoted in isolation, this is the line that frightens people. The lawyers and providers Mangis Bay works with have agreed preferential terms for our clients, and the result is a fraction of what the market usually quotes.

Ask for the setup terms →

What setup does to your NAV

Less than you think

Under Lux GAAP, formation expenses are typically capitalised and written off over up to five years, so the cost is spread as a few basis points a year rather than taken in one hit. Your first capital account statement does not open underwater, and the lifetime effect on net IRR is a rounding error.

About €50k a year to run, and a setup that will not frighten your LPs. That is the honest floor for a proper Luxembourg partnership, and it is a quarter of the number most people have in their heads.

The regulatory piece, in plain terms

Why €50k works: sub-threshold.

The number works because the fund sits below the AIFMD thresholds. Below that line, the manager registers with the CSSF rather than seeking full authorisation. No authorised AIFM to appoint, no depositary to contract, no CSSF product approval for the SCSp itself. The vehicle is governed by its LPA and its general partner.

That is not a loophole. It is the regime the directive designed for exactly this size of manager. The moment you cross the threshold, or your investors require a depositary regardless, you move to an authorised AIFM and the cost profile changes. We will tell you which side of that line you are on before anyone signs an engagement letter.

€100m

Assets under management, where leverage is used. Below this, the registration regime applies.

€500m

Assets under management, unleveraged and closed to redemptions for five years. The typical closed-ended private markets fund.

Depositaries, authorised AIFMs and CSSF product approvals required for a sub-threshold SCSp.

Where the other 100 to 150k goes

Five things that turn 50 into 150.

Once you know the floor, the gap explains itself. None of this is wrong. It is just not free, and it is not Luxembourg's fault.

Quarterly or monthly NAVs

Each additional valuation cycle is fund accounting hours, review and sign-off. Four NAVs is not four times one, but it is a lot more than one.

A RAIF or SIF wrapper

A regulated or reserved product brings an authorised AIFM and a depositary into the picture, both of which charge for the responsibility they take on. Right for many strategies, particularly when your investor base demands it. Unnecessary for many others.

Bespoke LP reporting

ILPA templates are one thing. Investor-specific reporting packs, look-through data and portal integrations are another.

Multi-layer holding structures

Every additional SPV is another set of accounts, another registered office, another set of board minutes.

Complex assets

Level 3 valuations, hedging, carried interest waterfalls with side pockets and recycling provisions all add cost, rightly.

The Luxembourg part was a fraction of it.

Why Luxembourg at all

If simple costs the same everywhere, why go anywhere else?

Investor recognition

European institutions, family offices and increasingly Asian and Middle Eastern allocators know the SCSp. It does not need explaining in a due diligence questionnaire.

Contractual freedom

The SCSp is a partnership. The LPA governs. You are not fighting a corporate law framework designed for something else.

Tax transparency

The SCSp is transparent for Luxembourg tax purposes, with access to a treaty network at the holding level when you need it.

A path to scale

The same GP and the same providers can carry you into a RAIF, a parallel vehicle or an AIFMD-passported product when fund two or three demands it. You do not rebuild. You add.

Ecosystem depth

The second largest fund centre in the world. Every lawyer, administrator, depositary, auditor and bank you will ever need is within a fifteen-minute walk of each other.

Both time zones

Mangis Bay operates between Luxembourg and Singapore. Sponsors in Asia and the Middle East get a counterpart who is awake when they are, and who knows the people in Luxembourg by first name.

Who this is for

Managers who were told to wait until fund two.

Emerging and mid-sized managers in private equity, venture capital, private debt, infrastructure and real estate
Sponsors outside Europe launching a first European vehicle
Family offices formalising a co-investment club
Anyone holding a quote they do not fully understand

How Mangis Bay fits

Not a law firm. Not an administrator. The person who knows which ones to call.

Mangis Bay works with a select number of high-quality Luxembourg providers, chosen because they are good with sponsors of this size and because they price simplicity honestly. Our job is to scope your setup, tell you plainly whether the €50k benchmark applies to you or where and why it does not, and put you in front of the right people in the right order. Structure, providers, banking, launch.

Every case gets discussed on its own terms. If you need more NAVs, more reporting or a RAIF, the number goes up and we will show you exactly why.

Send me your quote

Get a second opinion before you sign.

Forward the quote sitting in your inbox, or just tell me where you are. No obligation, no sales call unless you ask for one.

What you get back, within one business day

A written read of your quote.

Line by line: what is Luxembourg, what is structure choice, what is negotiable, and what is missing. Written by me, not a template.

The €50k benchmark sheet.

One page with what is inside, what is outside, the five cost drivers and the thresholds. Sent with my reply.

A 20-minute call, if useful.

Once you have read my notes, you decide whether a conversation is worth your time. Most people take it. Nobody is chased.

Emailchristophe.santer@mangisbay.com SocialLinkedIn — Christophe Santer ↗