Commodity Fund

Why Commodity fund managers want to create a Fund as a SLP in Luxembourg:

The use of the Special Limited Partnership is particularly advantageous thanks to its flexible legal and tax environment, with key benefits for commodity strategies being:

• No limitation in the type commodity the manager choose to invest in
• No risk spreading rule to observe – which means that the whole NAV of the commodity fund can be invested in one type of commodity
• Use of derivatives or leverage is possible with limitations
• The broker(s) can be appointed anywhere in the world
• No need of depository bank

And more generally:

• Unregulated fund
• No minimum capital
• Unlimited number of investors
• External auditor is not mandatory
• The fund can be listed on the Luxembourg Stock Exchange or on any overseas stock exchange
• Full tax transparency – no withholding tax upon distribution of the dividends or profit

The Special Limited Partnership is a vehicle that can be used to set-up as a commodity fund easily within a short timeframe (1-2 weeks).