Loan origination under AIFMD II: What fund managers need to know 

Luxembourg has firmly established itself as Europe’s leading hub for private debt funds, including loan origination strategies, driven by regulatory flexibility, investor appetite, and its reputation as a cross-border fund domicile. Over the past decade, the Grand Duchy has become the go-to jurisdiction for direct lending managers seeking efficient structures, such as Part II UCIs, SIFs, RAIFs and unregulated AIFs (mainly using an SCSp set-up).

The numbers underscore this momentum. According to the latest ALFI Private Debt Fund Survey, Luxembourg’s private debt market grew by 24.7% in assets under management (AuM) between December 2023 and December 2024. Loan origination strategies account for roughly 50% of the debt fund market. 

Beyond the quantitative expansion, there are also broader signs of growth. The sector’s expansion is fueled by institutional investors and a diversified investment focus spanning infrastructure, healthcare, technology, and energy. To meet this growing demand, Luxembourg will begin implementing AIFMD II in early 2026; this updated regulation aims to harmonize loan origination rules across the EU, and with it, Luxembourg is poised to strengthen its leadership in alternative credit markets.

A Luxembourg draft Law was issued in October 2025 (Draft Transposition Law) to implement AIFMD II and, as a result, amend the existing Luxembourg Alternative Investment Fund Managers Law of 2013. It is noted that Luxembourg has decided not to gold-plate AIFMD II. 

In order to help asset managers navigate these new compliance requirements, we have prepared this special brochure covering all the key points regarding loan origination.