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Private credit partners S.C.A. SICAV-RAIF: direct lending across Western Europe, DACH and Eastern Europe

by | Nov 20, 2025 | Investment funds, Private debt/Private credit

Private Credit Partners S.C.A. SICAV-RAIF: Direct Lending Solutions Across Western Europe, DACH and Eastern Europe – Luxembourg

A Luxembourg S.C.A. (Société en commandite par actions) SICAV-RAIF dedicated to private credit gives professional investors a flexible way to access senior, unitranche, mezzanine and NAV-based loans to mid-market borrowers in Western Europe, the DACH region and Eastern Europe, including Poland. It combines the corporate features of a joint-stock company with the alignment of a partnership, wrapped in a RAIF regime that has become a core tool for debt funds in Luxembourg.

Over the last decade, private credit has grown into a core building block of institutional portfolios. Global private credit assets under management are estimated at around USD 1.7 trillion in 2024, up from roughly USD 260 billion in 2008. In Europe alone, private credit AuM reached about EUR 430 billion in 2024, with European private debt volumes climbing to a record EUR 68.7 billion of deals in 2024, up from EUR 57.4 billion in 2023. Luxembourg sits at the centre of this growth: RAIFs now account for roughly 64% of Luxembourg debt funds, and around 64% of these vehicles follow a direct lending strategy.

Within this context, a “Private Credit Partners S.C.A. SICAV-RAIF” structure is designed to channel institutional capital into well-structured loans to resilient mid-market companies and sponsor-backed assets across Western Europe, DACH (Germany, Austria, Switzerland) and key Eastern European markets such as Poland.

1. Legal architecture: why S.C.A. + SICAV + RAIF works for private credit

The S.C.A. (Société en commandite par actions) is a Luxembourg partnership limited by shares. It is incorporated under Luxembourg company law and combines corporate and partnership characteristics. On one hand, one or more general partners with unlimited liability control the vehicle, on the other hand, shareholders (limited partners) who enjoy limited liability and hold freely transferable shares. For closed-ended private credit strategies, the S.C.A. is increasingly seen as an attractive alternative to the SCSp because it allows familiar corporate governance (board, general meeting) while preserving private-fund economics and carried interest at the general-partner level.

Framed as a SICAV (société d’investissement à capital variable), the fund’s share capital automatically equals its net asset value, with capital increasing or decreasing through subscriptions and redemptions rather than formal share capital amendments. This is especially useful when managing multiple closings, co-investments or feeder structures on top of a core private debt strategy.

The RAIF (Reserved Alternative Investment Fund) layer completes the picture. It is an AIF under Luxembourg law reserved to “well-informed” investors and must appoint an authorised external AIFM, but it does not itself require prior product authorisation from the CSSF. That combination delivers:

  • Speed-to-market: launch under a RAIF umbrella without lengthy product approval.
  • Full AIFMD framework through the AIFM, including passporting rights to EU professional investors.
  • Flexibility on eligible assets, allowing a broad spectrum of private debt instruments.

In practice, “Private Credit Partners S.C.A. SICAV-RAIF” typically operates as a closed-ended fund with several compartments or sub-funds, each focusing on a specific risk/return profile or geography while sharing an efficient operational and governance platform.

2. Investment universe: direct lending, credit facilities and NAV loans

The core activity of a private credit S.C.A. SICAV-RAIF is to invest in private debt instruments originated directly with borrowers or sponsors. Typical instruments include:

  • Senior secured term loans – often first-lien, with collateral over shares, receivables, inventory and hard assets.
  • Unitranche loans – combining senior and mezzanine risk in a single tranche, with pricing that reflects blended risk.
  • Second-lien and mezzanine debt – higher-yielding tranches subordinated to senior lenders, sometimes with PIK (payment-in-kind) features and warrants.
  • Revolving credit facilities (RCFs) – to support working capital, capex cycles or acquisition add-ons.
  • NAV and hybrid loans – loans secured by the net asset value of underlying private equity or private credit portfolios, popular with sponsors seeking flexible liquidity.
  • Bridge and acquisition facilities – shorter-dated financings to secure transactions ahead of a refinancing or capital markets take-out.

Ticket sizes generally range from EUR 20–250 million per borrower, depending on the size of the underlying company or sponsor platform. Margins on European direct lending typically sit in the 450–800 basis-point range above reference rates, with upfront fees and occasionally equity kickers further enhancing the gross yield.

3. Geographic focus: Western Europe, DACH and Eastern Europe (Poland)

The fund’s mandate can be designed to target three complementary private credit ecosystems:

  • Western Europe – France, Benelux, Spain and Italy offer a deep mid-market with recurring cash flows in sectors such as business services, healthcare, software, infrastructure-related services and consumer staples.
  • DACH region – Germany, Austria and Switzerland have mature sponsor-backed ecosystems and a strong Mittelstand of export-oriented industrials and technology-driven companies. Private credit often finances buyouts, succession planning and capex-heavy growth for these businesses.
  • Eastern Europe, with a focus on Poland – Poland stands out as a large, growing economy with robust manufacturing, logistics and IT services sectors. Private direct lenders can step in where local banks are constrained by capital or regulatory considerations, offering tailored, covenant-rich facilities in EUR or PLN.

By diversifying across these regions, the S.C.A. SICAV-RAIF can balance yield, legal certainty and growth dynamics while managing concentration risk at the country and sector level.

4. Borrower profile: mid-market companies, sponsors and funds

The target borrowers are typically:

  • Mid-market corporates with EBITDA between EUR 5–75 million, often private equity-owned but also family-owned or entrepreneur-led businesses.
  • Financial sponsors seeking unitranche or mezzanine solutions for leveraged buyouts, add-on acquisitions or dividend recapitalisations.
  • Fund-level borrowers using NAV, subscription or hybrid facilities to manage cash flows and enhance portfolio-level returns.

The fund’s investment team usually prioritises robust business models with:

  • Predictable, contracted or recurring revenue streams.
  • Strong cash conversion and resilient margins.
  • Defensive end-markets (e.g., healthcare, infrastructure services, B2B software, food logistics).
  • Experienced management and sponsor support.

5. Key features and benefits

For institutional investors such as pension funds, insurers, family offices and sovereign entities, a Private Credit Partners S.C.A. SICAV-RAIF offers the following features and benefits:

  • Enhanced yield – target net returns commonly in the mid- to high single digits per year, reflecting illiquidity and complexity premiums relative to liquid credit.
  • Downside protection – senior secured positions, financial covenants, maintenance tests and collateral packages are designed to mitigate loss severity.
  • Portfolio diversification – low correlation to listed equities and traditional investment-grade bonds, with exposure to private mid-market borrowers across several European economies.
  • Inflation and rate resilience – floating-rate structures allow coupon income to reset as reference rates move, helping returns keep pace with inflation in higher-rate environments.
  • Structured governance – the S.C.A. combines a corporate board with a general partner that carries meaningful “skin in the game”, aligning interest with limited partners.
  • Luxembourg toolbox – RAIF status, AIFMD passporting, and access to sophisticated service providers enable efficient cross-border capital raising and deployment.
  • Compartment flexibility – multiple sub-funds can be created under a single umbrella to implement different leverage levels, durations or regional focuses.

6. Investment process and risk management

A typical private credit S.C.A. SICAV-RAIF follows a disciplined investment process:

  1. Deal sourcing – through sponsor relationships, intermediaries and direct origination teams across Western Europe, DACH and Eastern Europe.
  2. Screening – initial review of sector, borrower quality, leverage, ESG factors, legal jurisdiction, and exit optionality.
  3. Due diligence – deep analysis of financials, forecasts, legal documentation, collateral and management team, often supported by external advisors.
  4. Structuring – negotiation of covenants, security, amortisation profile, pricing and intercreditor arrangements.
  5. Approval – investment committee sign-off, ensuring adherence to the fund’s mandate and risk budget.
  6. Monitoring – quarterly or monthly reporting, covenant tests, management calls and site visits; early-warning indicators trigger remedial action.

Risk is diversified through portfolio construction (number of borrowers, sector caps, country limits), conservative leverage at fund level, and active workout capabilities in stressed situations.

7. S.C.A. versus SCSp: why choose S.C.A. for private credit?

While many Luxembourg private credit funds are structured as SCSp (special limited partnerships), the S.C.A. brings specific advantages:

  • Corporate form – the S.C.A. is an incorporated company with legal personality, making it familiar to investors used to corporate fund vehicles.
  • Share capital and listing potential – the structure permits share listing or the creation of listed notes in certain strategies, offering optional liquidity paths.
  • Board governance – a full board of directors and clear corporate law framework may appeal to regulated investors and their governance requirements.
  • Hybrid economics – the general partner’s unlimited liability and carried interest preserve the economic alignment typically seen in partnership structures.

SCSp structures remain very popular, but for closed-ended, institutional private credit strategies targeting a broad base of European professional investors, S.C.A. SICAV-RAIFs are increasingly considered a “new vehicle of choice”.

8. How to invest in a Luxembourg private credit S.C.A. SICAV-RAIF

From an investor’s perspective, the steps to commit capital are straightforward:

  1. Confirm investor eligibility – verify that you qualify as a “well-informed” investor under Luxembourg rules (professional investor status or minimum commitment threshold).
  2. Request the fund documentation – obtain the limited offering memorandum, subscription agreement, LPA or articles of association, and side letter templates if applicable.
  3. Complete KYC and AML checks – provide identification, source-of-wealth information and any required regulatory classifications through the transfer agent or administrator.
  4. Review terms and negotiate (if needed) – review fees, governance, key person, ESG policy and reporting; negotiate side letters where ticket size and policy allow.
  5. Execute subscription documents – sign the subscription agreement, confirm commitment size and bank details for capital calls or distributions.
  6. Fund capital calls and monitor reporting – respond to drawdown notices, monitor quarterly reports and attend investor meetings or advisory committee sessions.

9. Example use cases across Western Europe, DACH and Poland

To make the strategy more concrete, consider three stylised examples:

  • Western Europe: French healthcare services – a sponsor-backed healthcare services platform in France seeks financing for add-on acquisitions across Benelux and Spain. The fund provides a EUR 120 million unitranche with a 6-year maturity, senior security and maintenance covenants; pricing reflects mid-market risk but benefits from healthcare’s defensive demand profile.
  • DACH: German industrial technology – a German Mittelstand technology manufacturer looks to expand production capacity and enter new export markets. The fund structures a EUR 80 million senior secured term loan and RCF package, combining asset-based security with cash-flow covenants tailored to cyclical order patterns.
  • Poland: logistics and warehousing – a Polish logistics operator requires capex for energy-efficient warehouses serving e-commerce and automotive clients across CEE. Local banks provide limited capacity; the fund offers a EUR 60 million senior secured loan with ESG-linked pricing incentives.

10. Role in an institutional portfolio

For long-term allocators, a private credit S.C.A. SICAV-RAIF strategy can play several roles:

  • Income engine – regular distributions from interest and fees support liability-matching needs of pensions and insurers.
  • Stability buffer – private credit has historically shown lower mark-to-market volatility than listed credit, albeit with valuation lags.
  • Complement to private equity – many borrowers are sponsor-backed, enabling consistent credit underwriting alongside private equity allocations.
  • Regional diversification – exposure to Western Europe, DACH and Poland adds geographic and currency diversification within an otherwise global fixed income allocation.

As always, investors must weigh illiquidity, manager selection risk, potential leverage amplification and regulatory changes when setting allocation sizes.

11. FAQ: private credit S.C.A. SICAV-RAIF focused on Western Europe, DACH and Poland

What is a Luxembourg S.C.A. SICAV-RAIF private credit fund?

A Luxembourg S.C.A. SICAV-RAIF private credit fund is a partnership limited by shares, set up as an investment company with variable capital and governed by the Reserved Alternative Investment Fund regime, investing mainly in private debt instruments such as senior loans, unitranche, mezzanine and NAV loans.

How does a private credit S.C.A. SICAV-RAIF generate returns for investors?

A private credit S.C.A. SICAV-RAIF generates returns primarily through contractual interest income, upfront and commitment fees, prepayment penalties and, in some cases, equity kickers or warrants attached to mezzanine or unitranche instruments.

What types of borrowers does the fund finance in Western Europe and the DACH region?

The fund finances mid-market companies and sponsor-backed platforms in Western Europe and the DACH region, typically in sectors such as business services, industrial technology, healthcare, software, logistics and infrastructure-related services.

Does the fund lend to companies in Eastern Europe, including Poland?

Yes, the mandate includes selected Eastern European markets, with a particular focus on Poland, where the fund can provide senior, unitranche or mezzanine facilities to growing mid-market companies and sponsor-backed assets.

What private debt instruments does the fund typically use?

The fund typically uses senior secured term loans, unitranche loans, second-lien and mezzanine debt, revolving credit facilities, bridge loans and NAV or hybrid loans secured by the value of underlying portfolios or assets.

What is the typical investment horizon for a private credit S.C.A. SICAV-RAIF?

The typical investment horizon for a private credit S.C.A. SICAV-RAIF is 7 to 10 years, including an investment period of around 3 to 5 years and a subsequent harvesting or realisation period.

Who can invest in this type of private credit fund?

This type of private credit fund is reserved to well-informed investors, including professional investors, institutional investors such as pension funds and insurers, family offices and high-net-worth individuals who meet the minimum commitment requirements.

How is risk managed in a Luxembourg private credit fund?

Risk is managed through conservative structuring, collateral packages, financial covenants, diversification by borrower, sector and country, active monitoring, and robust workout processes supported by the general partner, AIFM and specialised advisors.

How does a Luxembourg S.C.A. compare to an S.C.Sp for private credit strategies?

A Luxembourg S.C.A. is an incorporated company with share capital and a board of directors, while an S.C.Sp is a contractual partnership without legal personality; the S.C.A. may be preferred where investors value a corporate law framework, potential listing options and a hybrid governance model.

What role does leverage play in the fund’s returns?

Leverage can be used at fund level through subscription or NAV facilities to smooth capital calls and enhance returns, but is usually capped by the strategy and regulatory limits to maintain a conservative risk profile.

How are interest and fees distributed to investors?

Interest and fees received from borrowers are pooled at fund level and distributed to investors in line with the waterfall set out in the fund documentation, typically after management fees, fund expenses and any carried interest have been deducted.

What are the key benefits of allocating to private credit in Western Europe today?

Key benefits include attractive risk-adjusted yields, strong documentation standards, diversified exposure to resilient mid-market borrowers, and the ability to capture the financing gap left by banks retrenching under regulatory and capital constraints.

How liquid is an investment in a closed-ended private credit S.C.A. SICAV-RAIF?

An investment in a closed-ended private credit S.C.A. SICAV-RAIF is generally illiquid for the life of the fund, with limited or no redemption rights, although secondary transfers may be possible subject to transfer restrictions and investor approval processes.

How does the subscription and capital call process work for investors?

Investors sign a subscription agreement committing a fixed amount of capital, and the fund issues capital call notices over the investment period when it needs to fund new loans or follow-on investments; investors must fund each drawdown within the timeframe stated in the notice.

What are the main due diligence points for investors considering this fund?

Main due diligence points include the track record and team stability of the manager, pipeline visibility, underwriting and workout capabilities, leverage policy, fees and carried interest, ESG integration, country and sector limits, and alignment of interests between the general partner and limited partners.

Damalion supports entrepreneurs, investors and family offices in structuring and maintaining Luxembourg vehicles such as S.C.A. SICAV-RAIFs, including coordination on incorporation, banking and ongoing legal and tax alignment with local counsel. Please contact your Damalion experts now.

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