Luxembourg fund managers now have a route to statutory ring-fencing between pools of assets within a single SCS (Société en Commandite Simple) or SCSp (Société en commandite spéciale) without accepting a product-law wrapper. Bill 8814, filed on 30 July 2026, proposes to decouple the two.

The Bill would amend the AIFM Law of 12 July 2013 by inserting a new Article 28bis, giving SCS and SCSp alternative investment funds (AIFs) access to legally segregated compartments on a standalone basis, without requiring a SICAR, SIF, RAIF or Part II UCI overlay. The gateway condition is that the fund must be managed by a fully authorized alternative investment fund manager (AIFM) (Luxembourg or EU). Sub-threshold or registered-only AIFMs and non-EU managers fall outside the scope of the proposed regime, as do legal forms other than the SCS and SCSp.

For managers running e.g. parallel structures or co-investment programs, this is a practical development. It removes the most common reason for choosing a product-law vehicle when the product-law features themselves are unwanted.

The Problem This Solves

SCS and SCSp vehicles are frequently used in Luxembourg alongside foreign structures such as US Series LLCs, where each series represents a segregated pool of assets. The Luxembourg vehicle is expected to replicate that isolation on a compartment-by-compartment basis. Under a product-law regime, statutory segregation is available but comes with risk-spreading requirements, eligible-investor restrictions, minimum capital requirements and prescribed service providers that the foreign parallel vehicle does not carry. This creates structural asymmetry between vehicles that are meant to mirror each other.

Outside the product laws, contractual ring-fencing in the limited partnership agreement (LPA) has been the only available mechanism. It is workable in practice but does not provide statutory protection against third-party creditors, which leaves a degree of legal uncertainty that institutional investors and their counsel find difficult to accept.

Article 28bis would address both issues: it provides statutory segregation without requiring entry into a product-law regime, without imposing minimum capital, risk-spreading or eligible-investor requirements.

How It Works

The mechanics are deliberately familiar. They mirror the existing RAIF compartment regime (Article 49 of the RAIF Law), so documentation precedents and market expectations largely carry over:

  • Segregation by default: Investor and creditor rights attach to the relevant compartment’s assets only. Each compartment is treated as a distinct patrimony. The LPA can modify this, but the statutory starting point is full ring-fencing.
  • No offering document required: Investment policy disclosure follows Article 21 of the AIFM Law, but the format is not prescribed. Managers retain flexibility over whether to use a PPM, a supplement, or another format.
  • Independent lifecycle: Compartments can be created, operated and liquidated on their own timetable. Only the last compartment’s liquidation dissolves the vehicle.
  • No minimum capital requirement: Unlike the SIF or RAIF regimes, the new framework imposes no minimum regulatory capital.
  • Cross-compartment holdings permitted: Subject to anti-circularity and voting-suspension safeguards.
  • Compartment-level reporting: Optional separate annual reports, provided they include aggregated AIF-level data.

Choosing Between Article 28bis, a RAIF, or Separate Vehicles

This is not a binary choice. Managers typically face three options, and the right answer depends on the commercial context:

Article 28bis SCS/SCSp works best when:

  • The fund parallels a foreign segregated-series vehicle and structural symmetry matters;
  • Co-investment activity will scale over time (adding a compartment is lighter than incorporating a new entity);
  • The investor base does not require or expect a product-law label; and
  • Lean documentation and speed to deployment are priorities.

A RAIF remains preferable when:

  • The “RAIF” designation carries marketing or reputational weight with the target investor base;
  • Investors or their advisers expect the governance framework of a product law (depositary, prescribed valuation, issuing document); or
  • Risk-spreading requirements align with the strategy rather than constraining it.

Separate standalone vehicles may still be appropriate when:

  • Compartments would create unacceptable conflict-of-interest complexity;
  • Different compartments would require different AIFMs or fundamentally different governance;
  • Financing counterparties are unwilling to lend on a compartment-only security basis; or
  • The operational infrastructure cannot yet support compartment-level segregation in accounting, NAV and reporting.

Status and Timeline

Bill 8814 is now before Parliament and will proceed through the Conseil d’État opinion and parliamentary committee review. The final text may change. A vote is expected before the end of this year.

Practical Steps for Managers

Managers with existing SCS/SCSp platforms, or those currently evaluating whether to use a RAIF solely for compartmentalization, should assess now whether Article 28bis, once enacted, would offer a better structural fit.