If your fund sits with a third-party AIFM in Luxembourg, your in-house distribution team doesn’t have to. License them as tied agents under our German investment firm license, passported to Luxembourg via MiFID II, with more independence than what an AIFM umbrella typically offers.
Asset managers running funds with a third-party AIFM in Luxembourg can license their in-house distribution team independently via substnz Capital Partners, a BaFin-supervised German investment firm passported into Luxembourg under MiFID II. The distribution team operates as tied agents under substnz’s investment firm license rather than under the AIFM’s umbrella, retaining independence over how they work, what they market, and which funds they distribute. Available to non-EU and EU managers with Luxembourg AIF structures.
Many asset managers, especially non-EU GPs and those without their own ManCo, use a third-party AIFM in Luxembourg to launch a Luxembourg AIF. The AIFM handles fund management responsibilities. Often, the same AIFM also offers to host the manager’s distribution team under its own license. On the surface, this is convenient.
In practice, hosting distribution under the AIFM creates friction. The AIFM controls the scope of permitted activity. The team can typically only market funds that the AIFM administers. Investor relationships and the regulatory footprint sit, to varying degrees, with the AIFM rather than the manager. And if the AIFM relationship ends, the licensed status of the distribution team ends with it.
There is a cleaner alternative: license the in-house distribution team independently, as tied agents under a BaFin-supervised investment firm passported into Luxembourg via MiFID II. The fund structure stays where it is. The distribution layer becomes the manager’s, not the AIFM’s.
substnz Capital Partners is BaFin-supervised in Hamburg and MiFID II passported into Luxembourg and 17+ other EEA markets. Your distribution team operates under our German license but can serve investors in Luxembourg and across Europe.
The distribution team’s license is the substnz license, not the AIFM’s. If you change AIFM, restructure the fund, or expand to multiple funds, the distribution capability stays intact.
Your tied agents under substnz can distribute funds administered by any AIFM, subject to the regulatory scope agreed with us. You are not locked into one AIFM’s product set.
Each distribution professional is registered as a vertraglich gebundener Vermittler with BaFin under substnz. The registration is visible in the public BaFin register and recognised across the EEA via MiFID II.
AML/KYC, suitability, conflicts management, regulatory reporting, and the supervisory function run through substnz. Your team gets the compliance backbone of an institutional investment firm without operating one themselves.
MiFID II passporting from Germany to Luxembourg is well-trodden ground. CSSF interaction happens at the passport notification level; ongoing supervision remains with BaFin in Germany.
| Under your AIFM | Under substnz (tied agent) | |
|---|---|---|
| Who holds the distribution license | Your AIFM | substnz (BaFin-supervised investment firm) |
| Which funds you can market | Typically only funds the AIFM administers | Funds across multiple AIFMs, within the agreed regulatory scope |
| Control over how distribution operates | Defined by AIFM’s framework | Defined with substnz, in line with the tied agent regime |
| Independence from AIFM relationship | Tied to the AIFM relationship | Independent of the AIFM relationship |
| Cross-border reach | AIFM’s passport, often product-specific | MiFID II passport into 17+ EEA markets, for permitted services |
| Supervisory home | AIFM’s home regulator (e.g. CSSF) | BaFin in Germany, recognised in Luxembourg via passport |
Non-EU asset managers with a Luxembourg AIF structure who want an independent, BaFin-supervised regulatory home for their European distribution, not a sub-arrangement under their AIFM.
EU managers with their own AIFM or a third-party AIFM who want their distribution team to operate on a separately licensed footprint for governance, scaling, or M&A reasons.
Multi-strategy and multi-fund managers whose distribution capability needs to support several products across several AIFM relationships without re-papering with each AIFM individually.
Family-office-backed managers and platforms launching Luxembourg AIFs who want a tied agent setup that travels across future fund vintages and AIFM changes.
If you have a single fund, a single AIFM, and no plans to expand beyond that, hosting distribution under the AIFM may simply be the path of least resistance.
If your distribution is purely retail-focused inside a single jurisdiction, the MiFID tied agent / professional-client framework is not the right structure. substnz operates with professional and institutional clients.
Yes, in principle. Tied agents under substnz operate within an agreed regulatory scope and can distribute funds across multiple AIFM relationships, provided each fund and target investor population fits the permitted scope. This is one of the practical advantages versus being hosted under one AIFM.
No. The tied agents are registered with BaFin in Germany under substnz Capital Partners. The MiFID II passport into Luxembourg allows them to serve professional investors in Luxembourg without a local licensed entity. Your fund structure in Luxembourg stays exactly as it is.
Your AIFM agreement governs fund management responsibilities and typically does not exclusively require the AIFM to host distribution. The substnz tied agent setup sits alongside the AIFM relationship and covers the distribution layer specifically. We can review the interaction during onboarding.
No. The MiFID passport covers the distribution service: our tied agents provide investment brokerage for it. The fund’s own marketing permission to Luxembourg professional investors is a separate requirement that sits with the AIFM, either via the AIFMD marketing passport (for an EU AIF managed by an EU AIFM) or via national private placement. For a typical Luxembourg AIF with an EU AIFM, both layers fit together cleanly; the substnz layer assumes the fund-level permission is in place.
Reverse solicitation is under increasing scrutiny from ESMA and national regulators (BaFin and AMF in particular interpret it narrowly), reinforced by the 18-month pre-marketing look-back. Operating distribution through a licensed investment firm with passported MiFID services is a more durable structure than relying on reverse solicitation, particularly for proactive capital raising.
substnz is already passported into Luxembourg, so no additional country activation is needed. Onboarding the distribution team as tied agents typically takes 4 to 8 weeks (fit-and-proper, BaFin registration, compliance setup). They can begin operating in Luxembourg as soon as the BaFin registration is live.
MiFID II passporting from one EEA member state into another is the standard framework and does not require CSSF authorisation; it is recognised via the passport notification process between BaFin and CSSF. Ongoing supervision sits with BaFin as the home-state regulator.
Tell us about your fund structure, your AIFM setup, and your distribution team. We’ll walk you through how the substnz tied agent model maps to your Luxembourg AIF without disrupting the fund itself.