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Changes in Luxembourg SICAR legislation

02.11.2008

On 15 October 2008, the Luxembourg Parliament adopted several changes in certain aspects of the legislation regarding the investment company in risk capital (SICAR). New legislation seeks to further adapt the SICAR to the needs of the private equity community. Inter alia, the following changes were made to the SICAR legislation.

The name of any SICAR must now include the words „société d'investissement en capital à risque" or SICAR and the minimum subscribed share capital is EUR 1 million. Luxembourg's limited partnership i.e. société en commandite simple may now be set up as a SICAR with variable share capital. Significant importance should be granted to the umbrella structure which was introduced in the legislation. Any SICAR may now have multiple compartments on certain conditions. Umbrella structure provides SICAR a right to pool some of its assets and liabilities in a compartment and segregate the same from its assets and liabilities pooled in other compartments.

Pursuant to the changes in the SICAR law, any director of a SICAR, regardless of its legal form and any other person that takes part in the management of a SICAR, are now considered as eligible investors in addition to the general partners of a SICAR.

The valuation of any SICAR's assets is now based on their fair value instead of their foreseeable sales price estimated in good faith. The prospectus and each annual report together with the related audit report of a SICAR must be made available to the SICAR's investors, they need not to be published as previously required. SICAR's are also no longer required to inform their investors of their NAV every 6 months, but the prospectus may still entitle its investors to periodical NAV information.

Should you require any further information about this matter, please do not hesitate to contact Mr Hannes Vallikivi or Mr Mihkel Kolk.

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