Luxembourg · Pre-marketing

entities needed to find out whether European LPs want your fund. Build the fund last.

An authorised AIFM can pre-market a strategy to professional investors in all 27 member states before the GP, the fund or the PPM exist. One letter to the CSSF. No running costs until the LPs have said yes. Do not burn your fingers on reverse solicitation, and do not burn them on a fund nobody asked for either.

See the sequence → Book 15 minutes →

Entities needed0 Markets27 NotificationOne letter, within 2 weeks The clock18 months Who can do itAn authorised AIFM

The usual order

"Lawyers. GP. Fund. PPM. Then, a year of running costs later, they go and find out whether European LPs want it."

Sometimes the LPs do want it. Often they want something slightly different: another wrapper, a tilt in the strategy, a different fee line, a smaller first close. By then the structure has been built and billed, and the sponsor is negotiating against its own invoices.

A Luxembourg fund built for European LPs carries an authorised AIFM, a depositary, an administrator and an auditor from day one, and the running costs start the month the entities exist. The lawyers' first draft is paid for before the first LP meeting.

Since 2021 the directive lets you do it the other way round. An authorised AIFM can pre-market a fund that is not yet established, to professional investors across the EU, on one letter to the regulator. Test, then build.

Most sponsors outside Europe have never heard of it. Their counsel at home has no reason to tell them, and their counsel in Luxembourg is usually hired after the entities exist.

Three ways to talk to a European LP

Two of them work. One has a clock on it.

The directive gives you a front door before the fund exists, a passport once it does, and a deadline on the back door.

Before the fund exists

Pre-marketing

Strategy and ideas, a draft marked "not an offer", to professional investors in the member states on the letter. The fund does not need to exist. Neither does the GP. Art. 30a AIFMD, Art. 28-1 of the Luxembourg AIFM Law.

What it needs: an authorised AIFM, one letter to the CSSF within two weeks of starting, a documented trail.

Once it does

The passport

The fund exists, the AIFM notifies it, and you take money from professional investors across the EU without a country-by-country file. This is what European institutions expect to see.

The back door

Reverse solicitation

The investor comes to you, unprompted, and you can prove it. After pre-marketing starts, every subscription for 18 months counts as marketing, from anyone, including investors you never approached.

The honest comparison

What pre-marketing replaces

The year of running costs on a fund nobody asked for. The lawyers' second draft. The flights. The "we met at a conference" paper trail. The exception memo a European institution would otherwise need to write about you.

Talk it through in 15 minutes →

Reverse solicitation is not a route. It is what people write down afterwards.

What you can show

Strategy, yes. Subscription form, no.

The line is whether the person in front of you could sign today. If yes, it is marketing, and marketing needs the fund and the notification.

WhatAllowedConditionWhy

The strategy and the investment ideasYesNoneThis is what pre-marketing is for.

Track recordYesFair and not misleadingInformation, not an offer.

A draft term sheet or teaserYesMarked incomplete, not an offer, subject to change; lacks what an investor needs to decideArt. 30a allows drafts on these terms.

A subscription form, draft or finalNoNeverExpressly excluded.

A final PPM, LPA or constitutional documentsNoNever, for a fund not yet establishedExpressly excluded.

Anything an investor could commit onNoNeverThat is marketing.

From strategy to first close

Six steps. In this order.

Most sponsors start at step six and work backwards. The directive has been telling them for five years that they do not have to.

1. Strategy and target investor types

One page on the strategy. The investor types and countries you are after: pension funds, insurers, family offices, fund of funds. No names needed. This decides which member states go on the letter.

2. Appoint the AIFM

An authorised third-party AIFM pre-markets on your behalf, and later runs the fund. Same letter, same relationship, no rebuild. Its fee scales with assets, so before there are any it costs little.

3. One letter to the CSSF

Within two weeks of starting, in the form of Circular CSSF 22/810: member states, periods, strategy, any AIFs. The CSSF informs the other regulators.

4. The conversations

In the member states on the letter. Strategy, ideas, track record, a draft marked "not an offer". No subscription forms, no final documents. A documented trail of who saw what.

5. Soft circles

Now you know what to build: the wrapper, the terms, the first-close size, the countries that matter. The fund you incorporate is the one the LPs said yes to.

6. GP, fund, PPM, passport, first close

Build the entities, finalise the documents, notify for marketing under the passport before the first close. Every subscription in the 18 months after pre-marketing started goes through this door.

2 weeks

to send the pre-marketing letter to the CSSF after you start.

18 months

during which every subscription counts as marketing, from anyone, whether you approached them or not.

member states reachable on one notification, for pre-marketing and, later, for the passport.

Find the LPs first. Then build the fund they said yes to.

Why the third-party AIFM is the key

Not a cost you incur later. The thing that opens the door now.

Only regulated entities can pre-market

The AIFM, or on its behalf a MiFID investment firm, a credit institution, a UCITS management company, another AIFM or a tied agent. A sponsor without a licence cannot, however good the deck.

The same AIFM runs the fund

The AIFM that signs the letter is the AIFM that later notifies the passport and manages the fund. One relationship from the first conversation to the first close.

It is what the LPs ask about

European institutions want to know who the AIFM and the depositary will be before they soft-circle. Naming them at the pre-marketing stage shortens every later conversation.

It carries the regulatory weight

Notification, documentation, the 18-month tracking, the eventual marketing notification. The AIFM's compliance function does this every week. Yours does not have to exist yet.

It costs little before there are assets

AIFM fees scale with assets under management. A pre-marketing engagement with no fund is a fraction of a running mandate, and you only move to the mandate once the LPs have said yes.

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 AIFMs in Luxembourg by first name.

Who this is for

Sponsors who were told to incorporate first.

Sponsors outside Europe with a strategy and no European entities yet
First-time managers who were told to build the fund before talking to anyone
Managers who raised fund one through "reverse solicitation" and want fund two done properly
Family offices testing whether outside capital exists for the book they already run

How Mangis Bay fits

Not an AIFM. Not a law firm. The person who knows which ones to call, and who sits in the room.

We map your strategy to the investor types and countries, line up the AIFM that will pre-market and later run the fund, set the countries on the letter, and open the doors. The AIFM pre-markets. We make sure there is someone in the room to pre-market to, and we are in that room with you.

Every case is scoped on its own terms. If your strategy needs a different wrapper, a different AIFM or a different set of countries, the plan says so and shows why.

Talk it through

Fifteen minutes. Then you know.

No form to fill in, no strategy to send. Take the sheet, and if Europe is on your list, book a slot and we talk about whether pre-marketing is your route.

Two things, both free

The pre-marketing sequence sheet.

One page: the six steps, the three routes, what you can show and cannot, who may pre-market. No gate.

Open the sheet (PDF) →

15 or 30 minutes with me.

Pick a slot directly in my calendar. We talk about your strategy, the investors you are after, and whether pre-marketing fits. Nobody is chased afterwards.

Book a slot →

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