Interview with Nigel P. Williams, Founder of Royalton Partners

Interview with Nigel P. Williams, Founder of Royalton Partners


Royalton Partners

Royalton Partners is an authorized Alternative Investment Fund Manager headquartered and regulated in Luxembourg.
Royalton Partner’s management team has been investing together since 1990 and is focused on the management of illiquid assets held in closed-ended fund structures, including private equity, real estate and infrastructure.
Currently, Royalton Partners runs two business lines: CEE Private Equity Management and third party AIFM platform.
Royalton has 14 professionals representing 7 nationalities; the core of the team resides in Luxembourg.

Why did a company like Royalton Partners choose Luxembourg?

We chose Luxembourg because as a country, it has the largest number of investment funds in the world outside the US. In addition to this, the Grand Duchy has the right fund structures to grow a third party ManCo business.

Over the next few year, what will you need to run a business efficiently?

Royalton is building its internal systems and strengthening its core compliance and risk teams. We need to assist clients not only by managing their money but also by helping them to raise it.

What sort of threats and opportunities have you identified for the coming years?

I think our key opportunities lie in continuing to develop our Luxembourg business and to boost our relationships with Germany, France and Spain. I haven’t identified any threats but from a regulatory perspective, I think that the current situation is static because the AIFMD has not been fully implemented across the EU. Until it is implemented in the Netherlands and Scandinavia, a significant amount of business will pass us by. People won’t need our services until those countries are fully compliant with the AIFMD. If you want to raise money in France, Germany, Italy, Spain and Austria, you need the structure of an AIFM. Outside of that zone, there is no need for it. The biggest threat for us in the medium term is that the AIFMD will not be fully implemented in other EU countries.

What effect has the digital transformation had on your business?

We continue to upgrade our systems but we’re not a massive asset management company and we deal with a limited number of clients. We are conscious of the need for an efficient digital transformation, should our client base drastically increase. We currently operate with a small number of very big clients, managing 500 million or a billion euros on their behalf. Companies need efficient systems when dealing with a huge number of clients. However, we’re in a different position.

We chose Luxembourg because as a country, it has the largest number of investment funds in the world outside the US.

EQT creates one fund hub in Luxembourg

EQT creates one fund hub in Luxembourg


In 2012, EQT decided to manage future funds onshore. Since then, eight funds have been successfully closed across General Partners in the UK, the Netherlands and Luxembourg. Now EQT is taking the next step in harmonizing and future-proofing its fund management with the decision to create one hub for future domiciliation of funds in Luxembourg.

The decision to concentrate EQT’s fund management to Luxembourg is based on the predictability needed to ensure a top-quality product and service level. The consolidated hub for General Partners is managed under the EU directive for Alternative Investment Fund Managers (AIFMD) and is a transparent and long-term solution, beneficial for both investors and other stakeholders.

Peter Veldman, who has more than 20 years in the European investment industry, is appointed Head of Fund Management.

EQT update

Luxembourg Breakfast in Zurich (9 March 2017)

Luxembourg Breakfast in Zurich (9 March 2017)

In partnership with SECA, Swiss Private Equity & Corporate Finance Association.

The Luxembourg Private Equity and Venture Capital Association organizes its 4th annual discussion and exchange forum.

9 March 2017


7.45 a.m.  – Registration & Breakfast

8.30 a.m. – Welcome by Paul Junck, LPEA

8.35 a.m. – Discussion Panel with Q&A

Anja Grenner, Fund Services Leader, SGG Group (moderator)
Philipp Mueller, Senior Vice President at Partners Group
Stephanie Aldag, Executive Director, Senior Legal Counsel, Adveq
Christoph Merz, Senior Product Manager, responsAbility Investments AG
Benjamin de Zordi, Tax Partner at PwC Switzerland
Christian Hertz,
Director Legal, Luxembourg Investment Solutions
Tobias Wieczorek, Senior Manager, KPMG Luxembourg
Harald Strelen, Partner, TaxInvest

11.00 a.m. – Networking & Farewell Drinks

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Luxembourg introduced the Reserved Alternative Investment Fund (“RAIF”) in July 2016. This fund operates and is taxed just like the SICAR and SIF, the known Luxembourg vehicles for investments in Private Equity, Venture Capital and Real Estate. Unlike the SIF or the SICAR, the RAIF does not have to be authorized by the Luxembourg financial regulatory authority. It is only indirectly regulated at the level of its authorized Alternative Investment Fund Manager (“AIFM”) and its depositary pursuant to the AIFMD, both of which it has to appoint no matter the size of the RAIF. That way the RAIF combines all the advantages of the existing vehicles for alternative investments with a quick time-to-market.

In this workshop participants will have the chance to learn more about the diverse structuring options, see practical examples and possibilities of converting existing vehicles into RAIFs.

This workshop will also discuss the consequences Brexit may have on Luxembourg as a financial hub and what this could mean for Swiss Fund promoters. Luxembourg AIFMs, together with AIFM service providers, will report how this topic has evolved in recent months and what they expect for the medium and long run.

As in previous years Swiss fund managers that are familiar with Luxembourg structures will participate in the discussion panel and share their experience with the audience.

This will also be the occasion to take stock of the progress made regarding ESMA’s decision to allow Swiss AIFMs to benefit of the third country regime in fund distribution.

Swiss and Luxembourg lawyers, tax experts, service providers and fund distributors will point out relevant trends in the field of taxation. Some of the topics that will be discussed include among others Transfer Pricing, BEPS, the application of the Parent-Subsidiary-Directive, all of which impact the structuring of PE and VC Funds already.

This workshop gives participants the chance to engage with experts from Luxembourg and Switzerland on the changing parameters in the field of fund structuring and distribution.



LPEA Roadshow Sponsors



Meet us at the Au Premier

Zürich HB
Bahnhofpl. 15
8001 Zürich

Guest article: High-level overview of the AIFMD’s “asset-stripping” provisions

Guest article: High-level overview of the AIFMD’s asset-stripping provisions

The Alternative Investment Fund Managers Directive (AIFMD) was introduced in 2011. Essentially, its purpose was to add further regulations to the management, administration and marketing of Alternative Investment Funds (AIFs) within the European Union (EU). The scope of the AIFMD is broad and captures the management and marketing of AIFs. In essence, the AIFMD applies to (i) all EU AIFMs managing and marketing AIFs in the EU and (ii) all non-EU AIFMs who either manage EU AIFs or market a non-EU or EU AIF to EU investors.

Section 2 of Chapter V of the AIFMD imposes obligations on AIFMs managing AIFs that acquire major shareholdings in, or control of, non-listed companies and issuers, such as notification of acquisition, disclosure requirements, annual reporting requirements and restrictions on asset stripping. In particular, Article 30 imposes restrictions on distributions by EU portfolio companies during the first two years following acquisition of control. These asset-stripping provisions may potentially cause deal-structuring issues and are the focus of this analysis.

More specifically, if an AIF acquires control of a non-listed EU company, for a period of 24 months following the acquisition it cannot facilitate or support any dividends, capital reduction, share redemption or share buy-backs which:

  • reduce the net assets of the company below its subscribed capital plus its non-distributable reserves; or
  • exceed the amount of the company’s cumulative realised profits plus other distributable reserves, less the aggregate of any cumulative losses and other non-distributable reserves.

These restrictions are subject to some limited exceptions. In particular, the asset-stripping rules do not apply if the controlling influence is acquired in a small or medium-sized company (defined as companies which employ fewer than 250 people, have an annual turnover not exceeding EUR 50m and/or annual balance sheet not exceeding EUR 43m). Exceptions also apply to vehicles involved in purchasing, holding and administrating real estate. Also, these rules do not apply to any distribution, capital reduction, share redemption or acquisition of own shares made by a non-listed company that has its registered office outside of the EU.

Practical impact

From a practical standpoint, the asset-stripping rules would be relevant if a transaction such as a dividend recapitalization, refinancing, merger or reorganisation of a portfolio company took place within two years following the date of acquisition of that company by AIFs. This is because such transactions often involve, or are shortly followed by, a distribution, capital reduction or acquisition of own shares by the portfolio company.

What is important though is that the AIFMD rules do not contain a blanket prohibition on such transactions per se. But these new asset-stripping rules should always be kept in mind by AIFMs managing AIFs and their legal advisors when planning and structuring the above-listed transactions. With the proper planning, we believe it should often be possible to structure and implement a proposed transaction without contravening the asset-striping rules. For example, a distribution of cash/assets to the shareholders should not be caught by the rules if it is implemented by means of the repayment of the shareholder loan. Thus inserting a shareholder loan into a company’s financing structure is likely to provide more flexibility than the standard equity instruments (such as preference shares).

Furthermore, there is no statutory definition of the term “capital reduction”. Thus it is currently unclear whether such term refers only to a reduction in the nominal value of a company’s registered share capital or would also include a reduction in a company’s share premium account (or similar accounts such as account 115 in Luxembourg). Therefore relevant analysis, including the legal analysis of the domestic company law of the portfolio company’s jurisdiction, is necessary.

Last but not least, the rules provide that AIFs must use their “best efforts” to prevent any prohibited transaction from taking place during the requisite period and do not provide that such obligation ceases to apply upon the private equity firm disposing of its shares in the relevant company.


To conclude, while we do not expect that the asset-stripping rules will limit the freedom of AIFMs managing AIFs in any significant way, it is important that such rules are kept in mind when planning and structuring an acquisition of the target. This is simply to avoid the situations where portfolio companies are prevented from carrying out a proposed transaction that, with the appropriate preparation, would have been otherwise feasible.

It is important to point out that a breach of these rules should generally have an impact on the validity of a distribution, capital reduction, share redemption or acquisition of own shares from a company law perspective. Nevertheless, failure to comply with the asset-striping provisions can result in the variation or cancellation of an authorised person’s permission to carry on regulated activities or the imposition of additional requirements. Theoretically, this could lead to the AIFM losing the required permissions to manage the AIF or have additional requirements placed on their conduct. Last but not least, it could also lead to significant reputational damage for a given AIFM.

by Maarten Verjans

LPEA’s Market Intelligence Committee co-Chair

Partner, PwC Luxembourg

Roundtable: Third-party AIFMs are here to stay

Third-Party AIFMs are a new type of entity which has emerged as a result of the introduction of the Alternative Investment Fund Managers Directive (AIFMD) in the EU/EEA. Some AIFMs are also classified as “Super ManCos” (Super Management Companies), notably those using the same legal entity to consolidate operations for both UCITS funds and AIFMD-compliant funds. Using a third-party AIFM, a fund sponsor that is not itself licenced as an AIFM, can distribute and market its funds across the EU/EEA and beyond, using the passport of the AIFM. Since the Directive came into force in 2013, Luxembourg has witnessed an increase in the number of local players embracing this new opportunity. LPEA invited four of these players over a roundtable moderated by a fund manager, to debate how this “new” opportunity is changing the fund business.

Roundtable held by the Luxembourg Private Equity & Venture Capital Association on January 18th 2016 with the participation of Benoît Chéron (moderator), CFO, IDI Emerging Markets (IDI EM); Nigel Williams, Co- founder and Chairman, Royalton Partners; Daniela Klasén-Martin, Managing Director, Crestbridge; Alexandre Dumont, CEO, BIL Manage Invest and Pierre Weimerskirch, Co-founder, Luxembourg Investment Solutions (LIS).

Capital V #4

Capital V #4

The magazine of LPEA – 2H 2014


3TS interview:Creating a Hub for Innovation

Crowdinvesting – making the private equity industry accessible for everyone?

Creating a Hub for Innovation: roundtable on venture capital in Luxembourg

Bamboo Finance – a pioneer impact investor with track record

ESG: the growing elephant in the private equity room

Private Debt Funds – an evolving asset class

AIFMD – Navigating the distribution maze



Capital V #3

Capital V #3

The magazine of LPEA – 1H 2014


Mangrove Capital Partners: after Skype, Wix! – a Nasdaq IPO success

Interview with Jean-Marc Goy, CSSF

Interview with Guillermo Morales, GGM Capital


Is the Luxembourg Special Limited Partnership really so special?

Domiciliation – setting up in Luxembourg

Trends – the wisdom of Crowdfunding

Life in Luxembourg

Business woman – Betty Fontaine



Capital V #2

Capital V #2

The magazine of LPEA – 2H 2013


AIFMD Remuneration: Exceptions make the rule

Interview: Julien Kinic, IDI Emerging Markets

Akuo Investment Management

SecureIT: How Luxembourg got in the data centre map

European Investment Fund – Social Impact Accelerator Fund

Setting the stage for niche-based Biomedicine

Bringing substance to Luxembourg

The expat education conundrum



Capital V #1

Capital V #1

The magazine of LPEA – 1H 2013


Metrocab and Citeecar: vehicles of change!

Private Equity in Luxembourg: 3 steps ahead

Invest Industrial: turning Ducati around

The role of professional associations

What about the current tax environment?

Advent Venture Partners – Life Sciences’ Venture

The EUVECA label

Kabam: Paving the way for a digital future