Luxembourg Part II UCI-AIF (ELTIF)
Article 6
EUR
11-14% net annual returns 1)
Open-ended, minimum holding period of 8 years (7 years lock-up + notice period of 1 year)
Semi-liquid, redeemable with notice
Variable, but targeting 2-3% p.a. on committed capital paid out yearly from the second year onwards
200+ companies
ISIN Fee From EUR 25k: RGV Redstone Global Venture ELTIF R (ISIN: LU2847069353), 0.99% p.a.; From EUR 250k: RGVRedstone Global Venture ELTIF I (ISIN: LU2847069437), 0.69% p.a.; From EUR 5M: RGV Redstone Global Venture ELTIF P (ISIN: LU2847069510), 0.39% p.a.
1) These target returns are hypothetical, and the assumptions used to establish such returns may materially differ from actual events and conditions and returns may differ. Furthermore, in calculating the target returns for the Fund, Redstone has made certain assumptions, including in respect of: (i) an average assumed hold period for each investment (ii) average annualized cash yields and capital appreciation of investments; (iii) a specific management allocation rate; (iv) a specific carried interest rate, after specific conditions are fulfilled; (v) average estimated Fund expenses attributable to investors; and (vi) an estimated rate of deployment of the Fund’s capital in investments. Where a target return refers to a target distribution yield or return, recipients of this Presentation should note that distributions by the Fund are a net figure, are not guaranteed and that the Fund’s manager or board or directors may decide in their discretion to withhold any distributions, even in respect of classes of shares or interests in the Fund which provide a greater likelihood of distributions being made to their holders.
We have classified this product as 5 out of 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact our capacity to pay you. The recommended holding period for the product is ten (10) years. The actual risk can vary significantly. You may not be able to sell your product easily or you may have to sell at a price that significantly impacts how much you get back. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you. The attention of potential investors is drawn to the risks to which any investor is exposed by investing in the Fund. Potential investors should pay particular attention to the risks described in the dedicated section of the Prospectus and Key Information Document (KID). In making an investment decision, investors must rely on their own examination of RGV - Redstone Global Venture ELTIF and the terms of the offering, including the merits and risks involved. Potential investors should not construe the contents of this Website and/or the Prospectus as legal, tax, investment or accounting advice. The following is a summary description of the principal risks of investing in the Fund. The order of the below risk factors does not indicate the significance of any particular risk factor. Complete information on the risks of investing in the Fund is set out in the Prospectus and should be read alongside the risk factors on this page. Capitalised terms not otherwise defined herein have the meaning set forth within the “Glossary of Defined Terms” of the Prospectus.
General risk factors
An investment in the Fund’s sub-funds involves risk and is only suitable for investors who can bear the economic risk of loss, including a total loss. There is no guarantee that investment objectives or targeted returns will be achieved; risks may occur individually or in combination and can reduce returns and/or lead to loss of capital.
Self-assessment of the investment
Units are only suitable for investors who can assess the advantages and risks (independently or with qualified advisors) and who have sufficient financial resources to bear losses up to a total loss. Investors should consult legal/tax/financial advisors and reassess the decision in light of their individual circumstances.
Lack of fungibility and illiquidity of investments
Many investments may be highly illiquid and difficult to sell; exits depend on successful implementation strategies that can be negatively affected by numerous factors. The Fund may be unable to divest at attractive prices/times and could be forced to realise losses before profits are achieved; investors may bear the financial risk for an indefinite period.
Potential conflicts of interest regarding co-investment opportunities
If co-investment opportunities are granted to third parties or certain investors, interests between co-investors may conflict. The management company cannot guarantee conflicts will be resolved in investors’ favour.
Challenges when identifying investment opportunities
Sourcing and acquiring attractive investments is highly competitive and uncertain; the sub-funds compete with well-resourced institutions and other vehicles. As a result, investments may be unavailable or only available on unfavourable terms, materially reducing returns.
Currency and financing risks
Interest-rate and FX fluctuations may negatively impact liquidity and asset values, particularly where assets and cash flows are in currencies other than EUR. Borrowing (direct or indirect) may increase costs, create termination/repayment risks, and may require recapitalisation under worse conditions; collateral could be enforced if repayment is not possible.
Custody risks
Holding assets (especially abroad) entails loss risk due to insolvency, negligence, or force majeure; liability regimes may differ (e.g., where assets are held via central securities depositories). Third-party custodians may be used; damage claims against custodians may be only partially or not at all recoverable.
Reliance on the management company, portfolio manager and investment advisor
Investors rely on the management company, investment advisor and portfolio manager to select and monitor investments consistent with the sub-fund strategy. No guarantee can be given that these parties will always achieve this, including ongoing monitoring of illiquid investments.
Newly established participation structure
The participation structure is newly established and therefore not yet tested in practice. This may create additional uncertainties in implementation and operations.
General economic and market conditions
Market, economic and financial conditions may adversely affect portfolio companies, target funds, liquidity and exit opportunities. Downturns can reduce valuations, prolong holding periods, and impair performance.
Exit and disposal risks
Successful realisation of returns depends on exits under acceptable market conditions; there is no assurance that suitable exit opportunities will exist at the relevant time. Forced or delayed sales may reduce proceeds and returns.
Risks associated with investments in other funds
Target fund risks depend on underlying assets/strategies; target fund managers act independently and strategies can overlap or offset. The management company generally cannot control target funds and may learn portfolio composition with delay; redemptions may be possible only under poor conditions or not at all, especially for closed-end structures or where redemptions are suspended.
Investment spectrum and concentration risk
Within the permissible framework, a sub-fund may concentrate on a few sectors/markets/regions, increasing exposure to sector-specific shortages and volatility across economic cycles.
Diversification may be limited in certain phases
Diversification and portfolio composition requirements may be suspended during defined initial and/or closing phases, potentially increasing concentration risk.
Restricted redemption and possible suspension
Redemptions may be subject to significant restrictions; investors cannot rely on being able to redeem units as planned. If redemption is suspended, investors may be unable to redeem for the suspension period.
Limited secondary-market liquidity for units
Investors should not assume a functioning secondary market for units or that units can be sold at short notice or at favourable prices. Limited liquidity and transferability may constrain an investor’s ability to dispose of units.
Aborted transaction costs
Costs may be incurred in connection with acquisitions/sales even if a transaction ultimately does not materialise, and these costs are borne by the relevant sub-fund, reducing returns.
Documentation and interpretation risk
Prospectus and other fund documents may contain inconsistencies or be subject to interpretation; there is a risk of misunderstandings regarding rights/obligations. In case of conflict, governing documents may prevail, potentially differing from an investor’s expectations.
Impact of high redemptions or subscriptions
Higher-than-expected redemptions or subscriptions can affect liquidity management and portfolio construction and may force asset sales or other measures at unfavourable times/terms.
Negative interest and low return on liquid assets
Liquid holdings may be exposed to negative interest rates and typically generate low returns. Central bank policy and reference-rate mechanics may further reduce yield and overall performance.
Valuation risk
Net asset value is calculated by the management company; there is no guarantee investments can be realised at those valuations. Later subscriptions at lower prices may dilute earlier investors; valuation frequency and asset valuation timing may differ across assets and the NAV process.
Tax risks
Tax treatment can be complex across Luxembourg, target investment jurisdictions, and investor residence; investors may be taxed even if distributions are not paid or are delayed. Tax rules and assessments may change, and investors remain responsible for their own reporting/filings.
Political risks
Investments (especially abroad) may be affected by nationalisation, confiscation, war, terrorism, policy changes, capital controls, and foreign regulatory authorisations/restrictions. Political, economic and legal developments may restrict opportunities or worsen outcomes.
Limited investor influence over management decisions
Outside any investor committee framework, investors generally cannot monitor day-to-day business or investment/divestment decisions and typically do not receive the same pre-investment information as the manager. Management remains at the discretion of the management company.
Risks associated with the management company and external service providers
If the management company loses its licence or cannot continue management, there is no assurance a replacement with comparable expertise/terms can be found, and the Fund may need to be dissolved/liquidated. The Fund relies on external providers (custodian, auditor, etc.), and failures in service delivery can materially harm operations.
Sustainability risks
Environmental, social and governance-related events/conditions may negatively affect asset values and can amplify other risks. Sustainability risks may also cause reputational damage and reduce profitability, potentially up to total loss.
Adverse sustainability impacts may not be fully captured
The Fund does not yet comprehensively and systematically account for adverse impacts of investment decisions on sustainability factors, partly due to evolving requirements and limited data availability.
IT and cyber risk
IT systems may be exposed to cybercrime and security breaches (data theft, disruption, disclosure/distortion of sensitive information), creating financial and legal risks. Third-party system risks cannot be fully controlled.
Changes in applicable law and regulation
Regulatory and legal requirements may change during the Fund’s life, potentially increasing compliance burden, costs, disclosure requirements, and restricting certain activities.
Fees and costs reduce performance
Fees and costs reduce investor returns and are largely payable irrespective of positive performance. Investing via target funds can create a double fee layer (sub-fund + target fund), reducing amounts returned to investors.
Target fund investment risk
Sub-fund I invests in target funds and is exposed to their strategies, decision-making, timing, liquidity constraints, and potential mismatches versus Sub-fund I’s assumptions. Outcomes depend significantly on third-party managers and the underlying portfolios.
General risks of investments in target funds
Target funds may pursue different or overlapping strategies, potentially compounding risk or offsetting opportunities; the management company typically cannot control target fund decisions. Redemption/sale of target fund interests may be possible only at unfavourable times/terms or not possible, especially for closed-end structures.
Qualifying portfolio company risk — Legal
Portfolio companies may face legal risks (e.g., disputes, IP, regulatory compliance), which can materially affect valuation and exit prospects.
Qualifying portfolio company risk — Growth
Growth assumptions may not materialise; portfolio companies may fail to scale, lose competitive position, or miss market adoption targets, affecting valuations and returns.
Qualifying portfolio company risk — Financial
Portfolio companies may have limited operating history, volatile cash flows, and financing dependencies; failures to secure funding or achieve profitability can lead to impairment or loss.
Qualifying portfolio company risk — Operational
Execution risk (product, hiring, governance, operations) can reduce performance or lead to business failure, impairing investment value.
Qualifying portfolio company risk — Macroeconomic
Economic downturns, market shocks, or sector dislocations can reduce demand, restrict financing, and impair valuations and exit opportunities.
Qualifying portfolio company risk — Leverage
Where leverage is used at portfolio or structure level, repayment obligations and covenant pressure can amplify downside outcomes and constrain operational flexibility.
Unit liquidity and redemption risk
Units may be difficult to transfer and redemption may be restricted; investors should not rely on liquidity at desired times or on favourable terms.
Liquid investments — Low interest rate and inflation
Low rates and inflation can erode real returns on liquid holdings and reduce the contribution of liquid assets to overall performance.
Liquid investments — Limited earnings potential
Liquid investments typically provide limited upside, particularly in low-rate environments, and may drag overall performance.
Liquid investments — Outflow risk due to redemptions
Redemptions can pressure liquidity management and may force adjustments to liquid holdings or portfolio construction at unfavourable times.
Liquid investments — Interest rate risk
Changes in interest rates can adversely affect the value and yield profile of rate-sensitive liquid instruments.
Liquid investments — Regulatory restrictions
Regulatory requirements may constrain the permissible liquid investment universe or the way liquid assets are managed, affecting returns and flexibility.
Concentration risk with illiquid investments
Illiquid investments can be concentrated by sector, stage, geography, or manager exposure; adverse developments in a limited set of positions can disproportionately impact performance and NAV.
FX hedging via derivatives
Hedging may be imperfect, may not fully eliminate FX exposure, and can introduce costs, basis risk, counterparty risk, and operational complexity that may negatively impact returns.
Borrowing risk — Credit and interest rate
Borrowing can increase costs and refinancing risk, and interest-rate movements can raise debt service burdens. Loan providers may demand repayment or enforce remedies, impacting liquidity and returns.
Borrowing risk — Capital call and liquidity pressure
If borrowing or liquidity needs require additional funding, capital calls and related timing/administrative constraints may create funding pressure; associated costs reduce distributions and can impair outcomes if liquidity cannot be secured efficiently.
