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Accessing EU Alts Investors via Luxembourg Parallel Funds

Insights into why a parallel fund structure may offer a way for non-European Union (EU) based managers to access EU alternative investment fund investors and key operational factors to consider.

Fund managers in Asia-Pacific and the United States (US) are increasingly considering a Luxembourg parallel fund vehicle to access EU investors alongside an established domestic alternative investment fund. In this structure the vehicle typically sits alongside a non-EU ‘master vehicle’ and may be comprised of several parallel funds co-investing in the same assets. As the parallel structure is in effect mirroring the master structure, it may offer operational efficiencies compared to other distribution routes. However, there are numerous factors to consider including the roles of the various key service providers such as the depositary and fund administrator to ensure a smooth operating model and robust governance before launching a parallel fund structure. Northern Trust’s new paper explores key considerations from an operational perspective, including:

  • Luxembourg’s flexible structuring solutions tool kit for alternative investment funds which includes a variety of options, depending on the investor requirements and fund size under the wider ambit of the Alternative Investment Fund Managers Directive
  • Why the governance model should be discussed upfront as part of the structuring discussion

Why Parallel Funds?

Non-EU based managers looking to widen their investor base to European investors may seek to deploy a parallel fund structure as it offers a number of advantages:

  • A parallel fund replicates the successful domestic fund ranges, optimising the investment process
  • It helps managers access new capital by tapping into different investor pools, whilst leveraging the domestic funds track record
  • Parallel funds typically adopt the same or very similar investment and divestment policies, targets and risk profiles as the original fund, which makes them relatively quick to establish
  • They may also support managers to achieve operational efficiencies by being able to replicate some of their operational processes across both their domestic and European fund, together with offering a more cost-effective structure

To read more, download the paper.


Insights into available options and current regulatory considerations when establishing a fund management company in Ireland or Luxembourg.

Insights on Luxembourg's resilient and innovative approach as discussed in Funds Europe's Luxembourg Report 2021 roundtable.

Luxembourg’s growing influence as a leading alternative investment funds hub is being driven by the multiple solutions it provides to global investment managers supported by its strong reputation and support infrastructure. Sara Gilbert, Northern Trust’s senior executive for alternatives business development, outlines the attributes helping Luxembourg to excel in this important fund sector.

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© 2021 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability as an Illinois corporation under number 0014019. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients or investors. For legal and regulatory information about our offices and legal entities, visit The following information is provided to comply with local disclosure requirements: The Northern Trust Company, London Branch, Northern Trust Global Investments Limited, Northern Trust Securities LLP and Northern Trust Investor Services Limited, 50 Bank Street, London E14 5NT. Northern Trust Global Services SE, 10 rue du Château d’Eau, L-3364 Leudelange, Grand-Duché de Luxembourg, incorporated with limited liability in Luxembourg at the RCS under number B232281; Northern Trust Global Services SE UK Branch, 50 Bank Street, London E14 5NT; Northern Trust Global Services SE Sweden Bankfilial, Ingmar Bergmans gata 4, 1st Floor, 114 34 Stockholm, Sweden; Northern Trust Global Services SE Netherlands Branch, Viñoly 7th floor, Claude Debussylaan 18 A, 1082 MD Amsterdam; Northern Trust Global Services SE Abu Dhabi Branch, registration Number 000000519 licenced by ADGM under FSRA # 160018; Northern Trust Global Services SE Norway Branch, 3rd Floor, Haakon VII's Gate 6, 0161 Oslo, Norway; Northern Trust Global Services SE, Leudelange, Luxembourg, Zweigniederlassung Basel is a branch of Northern Trust Global Services SE (itself authorised by the ECB and subject to the prudential supervision of the ECB and the CSSF). The Branch has its registered office at Aeschenplatz 6, 4052, Basel, Switzerland, and is authorised and regulated by the Swiss Financial Market Supervisory Authority FINMA. The Northern Trust Company Saudi Arabia, PO Box 7508, Level 20, Kingdom Tower, Al Urubah Road, Olaya District, Riyadh, Kingdom of Saudi Arabia 11214-9597, a Saudi Joint Stock Company – Capital 52 million SAR. Regulated and Authorised by the Capital Market Authority License # 12163-26 CR 1010366439. Northern Trust (Guernsey) Limited (2651)/Northern Trust Fiduciary Services (Guernsey) Limited (29806)/Northern Trust International Fund Administration Services (Guernsey) Limited (15532) Registered Office: Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3DA. Northern Trust International Fund Administration Services (Ireland) Limited (160579) / Northern Trust Fiduciary Services (Ireland) Limited (161386),  Registered Office: Georges Court, 54-62 Townsend Street, Dublin 2, D02 R156, Ireland.