Third Party AIFM Services

Royalton Partners provides a compliant gateway to EU capital for GPs pursuing real estate, private equity, infrastructure, private credit, listed equities, fixed income and fund of funds strategies.

Why choose Royalton Partners?

A pure-play, partner-owned AIFM

Royalton Partners' core business is acting as AIFM for its clients' funds. We have no depositary, fund administration or fund distribution business competing for your relationship. Your fund is covered by named partners and Conducting Officers, the senior managers the CSSF approves to run an AIFM's key functions, who have made investment decisions across private equity, real estate, infrastructure and credit for over 30 years. We have worked with and can recommend experienced depositaries, administrators, auditors and banks, and have long-standing experience working with service providers selected by the client.

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Reduce regulatory risk

Royalton Partners' model of performing regulatory portfolio management is designed to leave the sponsor outside the scope of the AIFMD. As a rule, there is no requirement to disclose the remuneration of the sponsor's senior personnel in the financial statements of the Luxembourg fund; under the AIFMD that disclosure obligation attaches to the AIFM's side. Using Royalton Partners' established regulated platform enhances the credibility of the structure.

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Insurance

As the authorised AIFM, Royalton Partners assumes the regulatory responsibility for the fund's portfolio and risk management, standing between you and the regulator's requirements. The AIFMD requires every AIFM to cover potential professional-liability risks, through additional own funds or professional indemnity insurance. Royalton Partners maintains a professional indemnity insurance programme with a current insured amount of EUR 75 million.

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Tax substance

Since regulatory portfolio management is not normally delegated outside Luxembourg, investment decisions are taken in Luxembourg. This supports access to Luxembourg's double-taxation treaty network for treaty-eligible fund structures. Royalton Partners can demonstrate strong tax substance, with a team of experienced professionals able to make investment decisions across all relevant alternative asset classes.

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Structuring flexibility

Luxembourg funds can be structured:

with or without legal personality

as tax-transparent or taxable (benefiting from double-taxation treaties where treaty-eligible)

as regulated or unregulated

with or without prior regulator approval

as single-strategy funds or platforms with compartments for multiple strategies or vintages

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Parallel fund structure — advisory model diagram

Example: why contract a third-party AIFM?

Step 1

A fund sponsor is preparing a new fund and wants the AIFMD marketing passport to raise capital from investors across the EU/EEA. Building its own authorized AIFM would require regulatory approval, regulatory capital, a Luxembourg office and a permanent Luxembourg team of at least 5–8 full-time staff, including experienced conducting officers. Practitioners expect 15–18 months from first preparation to authorisation. Until then, the sponsor cannot use the passport.

Step 2

Instead, the sponsor appoints Royalton Partners as its designated AIFM. The fund gains access to Royalton Partners' marketing passport, and the people, systems and controls are already in place. Through Royalton Partners' pre-marketing offer, the sponsor can approach professional investors across the EU/EEA before the fund has been established, with Royalton Partners notifying the CSSF. This is a low-cost, low-risk way to test investor appetite within the EU pre-marketing regime. Subscriptions can be accepted only after the fund has been established and the marketing notification has been completed.

Step 3

By appointing Royalton Partners, the sponsor does not take on the risks of an in-house AIFM. As the regulated manager, Royalton Partners carries the responsibilities of the legal fund manager. The sponsor also avoids the personal responsibilities of directors and officers of its own AIFM, and the fixed cost of a Luxembourg team, premises and infrastructure. AIFM fees are typically charged to the fund, not borne by the sponsor's payroll.

What Royalton Partners handles

Before formation, we work with you and your counsel on structuring and pre-marketing. From launch, Royalton Partners performs the core functions the AIFMD requires of the fund's manager:

Portfolio management: investment decisions for the fund, made in compliance with the fund's investment strategy on the recommendation of the principal fund or investment advisor.
Risk management: all functions related to the risk management requirements of the AIFMD.
Valuation: a valuation function independent of portfolio management, performed on the basis of data provided by the client or an appointed external valuer.
Marketing: notification of the CSSF and other regulators as required.
Regulatory compliance: reporting obligations to the supervisory authorities — the CSSF and, for unregulated vehicles such as RAIFs, the AED — are met and robust governance is maintained.

Beyond these mandatory functions, Royalton Partners offers further services upon request:

Domiciliation and the provision of independent directors.
RC services: the AML control officer role ("Responsable du Contrôle") that Luxembourg AML regulations require funds to appoint.