The Part II UCI dates back to 1983 - which makes it older than most of the people now marketing it. After decades of quiet institutional use, it's suddenly the vehicle of choice for the world's largest alternative managers building evergreen products for the European wealth market.
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Regulator
Commission de Surveillance du Secteur Financier (CSSF), Luxembourg
Domicile
Luxembourg only
Investor eligibility
All investor types, including retail - subject to local distribution rules in each jurisdiction
Key legislation
Part II of the Luxembourg Law of 17 December 2010 on Undertakings for Collective Investment (the "UCI Law")
Product approval
Yes - requires prior CSSF authorisation and ongoing supervision
How UCI Part II fund works?
Luxembourg offers several vehicles that can hold private assets: the RAIF, the SIF, the SICAR. They're all flexible. They're all well-established. But none of them can accept money from an ordinary retail investor. The Part II fund can, which largely explains its current renaissance.
In an industry where every large GP is racing to build semi-liquid products for wealth management platforms and private banks, the Part II fund solves the distribution problem at source. It's CSSF-regulated, which satisfies compliance teams and it carries no investor eligibility restriction. A private bank in Milan, a wealth platform in Germany, an IFA in Zurich: they can all place their clients into a Part II fund without worrying about well-informed investor certifications or €100,000 minimums.
The RAIF to Part II evolution
In practice, many of today's most prominent Part II funds didn't start as Part II funds at all. They started as RAIFs.
The logic is straightforward. A RAIF launches fast - no CSSF product approval, potentially weeks instead of months. The manager uses the RAIF to build a track record with well-informed investors, seed the portfolio, and prove the strategy works. Then, once the vehicle has assets and history, the manager converts it to a Part II UCI. This brings CSSF oversight but more importantly it opens the door to the retail and mass affluent market.
Examples of UCI Part II Funds
Carlyle AlpInvest Private Markets
Launched in 2024, the fund manages $1.5B as of Dec 2025 and invests in private equity assets with the portfolio evenly split across Secondary GP-Centered at 34%, Co-Investments at 33% and Secondary LP Interests at 32%. The fund structured as Lux SICAV (S.A.) under UCI Part II, invests globally with the US accounting for 67% of exposure. The portfolio diversified across 2,750 investments is predominantly focused on Mid Buyout strategies across Industrials, Information Technology and Health Care sectors.
Brookfield Infrastructure Income Fund
Launched in 2023, the fund manages $3.9B as of Dec 2025 and invests in infrastructure assets with the bulk of the portfolio allocated to Private Infrastructure Equity at 80.2%. The fund structured as Lux SICAV (S.A.) under EU AIF and UCI Part II, invests globally with North America representing 56% of exposure. The portfolio diversified across 57 investments is predominantly focused on Transport at 34% and Renewable Power & Transition at 27%.
Partners Group Global Value
Launched in 2007, the fund manages $9.2B in AUM as of Dec 2025 and invests in private equity assets with the bulk of the portfolio allocated to Buyout strategies at 74%. The fund structured as Lux SICAV (S.A.) under UCI Part II and EU AIF, invests globally with exposure balanced between North America at 48% and Europe at 42%. The portfolio targets a net return of 10-14% p.a. with complementary allocations to Private Credit at 15.6% and Growth at 7.3%.
The December 2025 rule change that matters
CSSF Circular 25/901 overhauled the Part II framework in December 2025. The change that matters most: the CSSF now formally calibrates diversification and borrowing constraints to the investor type within each compartment. Retail compartments get tighter limits. Professional-investor compartments get substantially more flexibility, including no statutory borrowing caps and higher single-issuer concentration allowances.
A single Part II umbrella can now house a conservative retail compartment alongside a more aggressive professional-investor compartment. Same vehicle, same AIFM, same operational infrastructure - different risk profiles for different audiences. For large managers running multi-channel distribution, this is extremely efficient.
What UCI Part II changes won't do?
CSSF approval takes three to six months. The ongoing regulatory burden is real. And cross-border retail distribution is a country-by-country exercise unless you add the ELTIF label - which grants the EU-wide retail passport. Most managers targeting broad European retail will end up layering ELTIF on top of Part II: the regulated engine underneath, the distribution passport on top.
For wealth managers evaluating these funds, skip the marketing deck and check the prospectus: what are the actual redemption terms? How large is the liquid sleeve? If the fund converted from a RAIF, did anything change in the process or just the label of it?
Disclaimer: This article is for informational and educational purposes only. It does not constitute legal, tax or investment advice. Regulatory frameworks are subject to change. Always consult qualified professional advisors before making investment decisions. Information is current as of publication.
