Regulatory Alerts2020-12-18
Added · Updated
CSSF Guidelines on Performance Fees in UCITS and Certain Types of AIFs
The CSSF applies ESMA Guidelines on performance fees to UCITS and AIFs marketed to retail investors in Luxembourg, excluding closed-ended AIFs and specific venture capital, private equity, or real estate funds. Managers must ensure performance fee calculations are verifiable, proportionate to actual investment performance, and symmetrical regarding allocation and reversal rates. Crystallisation frequency is generally limited to once a year, with exceptions for high-water-mark, high-on-high, and fulcrum fee models. Existing funds with performance fees must comply by the beginning of the financial year following six months from the application date of 6 January 2021.
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