From New York’s Central Business District to Luxembourg: How to Start Your Luxembourg Investment Fund

New York’s Central Business District is the deal engine of the United States of America (USA): Wall Street, Fifth, Park, Madison, and Sixth compress capital. Fund Managers raise in the United States of America (USA) and structure in Luxembourg to access Europe. A RAIF with an authorised AIFM enables speed and AIFMD passporting; SIF, Part II, and SICAR suit institutional or risk-capital strategies; SCSp (Special Limited Partnership) handles carry, feeders, and co-invest. Banking, KYC, and launch are standardized. Built in New York, scaled from Luxembourg—so strategies born in the United States of America (USA) reach EU investors beyond the United States of America (USA).

The New York Central Business District (CBD)

We spotlight today’s Manhattan business engine—its people, streets, sectors, and opportunities for capital and developers.

Snapshot: Scale, talent, momentum

New York’s CBD stretches across Midtown and the Financial District, anchoring the largest talent pool and capital market in the U.S.
New York City’s population rose for a second consecutive year to about 8.48 million by July 2024, a sign of renewed urban momentum that underpins demand across offices, labs, retail, and hospitality.
Functionally, the CBD spans Midtown—commonly 34th to 59th Streets between 3rd and 8th Avenues—and Lower Manhattan’s Financial District anchored by Wall Street.

The streets that move markets

These corridors double as a shorthand for industries and investor intent.

• Wall Street (Financial District): Metonym for U.S. finance; home to the NYSE and the Federal Reserve Bank of New York.

• Fifth Avenue (Midtown): Global luxury flagship corridor now undergoing a major pedestrian-focused investment program.

• Park Avenue (Midtown): Blue-chip headquarters spine (e.g., JPMorgan’s new 270 Park tower).

• Madison Avenue: Historic heart of advertising and brand strategy.

• Sixth Avenue (Avenue of the Americas): Tower canyons of corporate offices from Rockefeller Center south to Herald Square.

• Broadway, 42nd Street & 57th Street: Entertainment, media, and luxury spillovers that feed tourism, retail, and headquarters visibility.

Sectors & talent: where growth is sticking

Finance is the anchor, but tech, fintech, and life sciences are fueling the next cycle.
New York’s tech sector has added ~8,000 jobs per year on average (2014–2024), growing 64% versus ~17% for the overall private sector, while fintech fundraising share reached ~24–30% of U.S. totals in recent years—evidence that software and finance are converging on Manhattan’s grid.
Life sciences are scaling via the LifeSci NYC program (a $1.1B commitment), with ~20,000 jobs, 500+ R&D-stage companies, and 3.5M sq ft of commercial life sciences space as of 2024—concentrated in Midtown, Hudson Square, and Long Island City.

Market pulse: leasing, rents, and availability

Flight-to-quality and right-sizing are happening at once.
CBRE’s Q2-2025 figures show Midtown availability down to ~15.5% with $82.28/sf average asking rents; Downtown availability ~20.5%; Midtown South ~20.5% with improving absorption—clear signs of stabilization in the prime corridors. 
At the trophy end, capital is recommitting: JPMorgan’s 270 Park Avenue nears completion, reinforcing Park Avenue’s HQ magnetism, while lenders and CMBS markets are selectively backing well-leased Midtown assets.

Development & conversion opportunities

Policy tailwinds are opening new plays for value-add investors.

• Hudson Yards – Western Yards next phase: City approvals green-lit thousands of homes, a 6.6-acre park, a K-8 school, and additional mixed-use density—extending the CBD’s western edge and spurring amenity-rich office-residential ecosystems.

• Office-to-residential conversions: New York State’s FY-2025 budget created the 467-m tax incentive and lifted the 12 FAR cap in targeted areas, unlocking conversion economics for aging stock in Midtown and FiDi (e.g., 5 Times Square).

• Cultural-tech anchors: Google’s Chelsea/Hudson Square campus and Pier 57 redevelopment continue to catalyze west-side retail, hospitality, and public realm upgrades.

Why this matters to entrepreneurs and capital allocators: New York’s CBD remains the place to raise, sell, and hire; Luxembourg is the place to structure, scale, and passport—an efficient pairing for cross-border mandates.

Setting Up Your Luxembourg Alternative Investment Fund

This section lays out fast, investor-tested Luxembourg vehicles that New York GPs, family offices, and institutions use to launch and scale strategies in Europe.

Why Luxembourg for New York sponsors

It’s the EU’s fund factory: flexible vehicles, deep service ecosystem, AIFMD passport, and tax-efficient outcomes.
Luxembourg’s toolkit lets you match asset class, investor profile, and speed-to-market—then distribute across the EU via an authorised AIFM and the AIFMD passport (and, where relevant, the ELTIF 2.0 label for semi-liquid retail access).

The quick-launch workhorse: RAIF (Reserved Alternative Investment Fund)

Best when you want regulated management without product-by-product approval.

• Regulatory model: The fund itself isn’t product-authorised by the CSSF; instead, it must appoint an authorised external AIFM (Lux or EU), enabling EU marketing to well-informed investors via passporting.

• Depositary & governance: RAIFs must appoint a Luxembourg depositary and fulfil standard governance and reporting under AIFMD (through the AIFM).

• Tax: Typically mirrors the SIF regime—0.01% subscription tax on NAV; generally exempt from corporate income, municipal business, and net wealth taxes; no withholding on distributions. A risk-capital RAIF can opt into the SICAR tax regime.
  Use cases: PE/VC buyout, growth, credit, infrastructure, real estate, secondaries where time-to-market matters.

The institution-grade evergreen: SIF (Specialised Investment Fund)

The SIF or Specialized Investment fund is a CSSF-authorised fund for well-informed investors with broad strategies.

• Regime: Product-level CSSF authorisation; appoint AIFM/depositary/admin/auditor.

• Tax: 0.01% subscription tax on NAV; otherwise generally exempt from income/wealth taxes.
  Use cases: Multi-compartment platforms, multi-asset or institutional mandates seeking a regulated label.

Pure play private equity: SICAR (Investment Company in Risk Capital)

The SICAR (Investment Company in Risk Capital) is a purpose-built for “risk capital” (private equity/venture capital) with favourable treatment of qualifying gains and income.

• Regime: CSSF-authorised product; invests in risk capital per law.

• Tax: Taxable in principle, but exempt on income and gains from qualifying risk-capital investments; no subscription tax. 
  Use cases: Classic PE/VC where portfolio clearly meets “risk capital” tests.

Broad-distribution alternative: Part II UCI

A regulated alternative fund under the 2010 Law (non-UCITS), including for real assets and private debt.

• Regime: CSSF-authorised product; appoint AIFM (external or internal).
  Use cases: Strategies targeting a wider (including certain retail) base subject to local rules.

The GP’s chassis: SCSp / SCS (Special/Limited Partnership)

The carry vehicle and feeder of choice, often paired with RAIF/SIF/SICAR. SCS (société en commandite simple) has got legal personality.

• Legal form: SCSp/SLP (Special Limited Partnership) has no legal personality (contractual partnership); SCS has legal personality—both combine a GP with LPs under a flexible LPA.

• Tax: Typically tax-transparent for Luxembourg income and net wealth tax (watch reverse-hybrid rules for investor mixes).
  Use cases: GP/Carry, co-invest, master-feeder, side-cars, joint ventures.

ELTIF 2.0 (optional overlay)

The long-term investment label redesigned for access and distribution.
ELTIF 2.0 (effective Jan 2024) relaxes portfolio/diversification and retail access rules, allowing AIFMs to wrap private markets for a broader investor base—often implemented via a Luxembourg vehicle plus an ELTIF label.

Typical launch map for a New York investment fund sponsor

From term sheet to first close, the steps are standardised and bankable. Damalion accredited experts offer you:

Pick the wrapper (RAIF for speed; SIF/SICAR/Part II where a regulated product is preferred). 2) Select the AIFM (Lux/EU), depositary, administrator, auditor, and legal counsel. 3) Draft the LPA/Issuing Document, set valuation, liquidity, and risk policies. 4) Open bank/custody in Luxembourg, complete KYC/AML. 5) For RAIF: AIFM sign-off and launch; for SIF/SICAR/Part II: CSSF authorisation then marketing via passport (professional investors).

Timelines & positioning

RAIFs emphasise time-to-market; SIF/SICAR/Part II emphasise product regulation.
Because a RAIF relies on an authorised AIFM rather than product sign-off, it is widely used for faster market entry compared to SIF/SICAR/Part II, which require CSSF approval. Many New York managers combine a Lux RAIF + SCSp GP/feeder stack to mirror Delaware economics while unlocking EU passporting.

Bottom line for New York entrepreneurs, family offices, PE/VC and private debt sponsors

New York’s CBD offers capital, talent, and pipeline; Luxembourg supplies a proven fund factory (RAIF, SIF, SICAR, Part II, SCSp) plus AIFMD and ELTIF 2.0 routes for EU distribution—an efficient pairing for cross-border growth. If you want intros to Luxembourg AIFMs, depositaries, and select banks, Damalion’s accredited experts can facilitate end-to-end setup and onboarding with depositary banks, alternative investment funds managers, independent directors. Need help launching your Luxembourg fund and banking in Luxembourg?
Contact your Damalion expert now.