Investments into distressed debt: A flourishing asset class in the COVID-19 world
Investments into distressed debt are an important niche market in Luxembourg which soared over the last decade, contributing to the Grand Duchy’s success as a prime location for the structuring of Alternative Investments in and through Europe. The current COVID-19 crisis, the resulting economic turmoil and the need of businesses to create liquidity should provide new opportunities for investments into distressed debt.
Broadly speaking, investments into distressed debt rely on the acquisition of non-performing loans or other distressed debt instruments at a price below par value. Thereafter, the idea is to realize capital gains upon the disposal or repayment of the debt instrument once the financial situation of the debtor improves.
Investments into distressed debt may be organised via different Luxembourg vehicles including, in particular, Luxembourg companies, securitization vehicles and fund vehicles or a combination thereof. This webinar provides an overview of the common investment solutions available in Luxembourg.
2. Distressed debt investment opportunities in the post-COVID-19 world
3. Luxembourg solutions for investments into distressed debt
b) The specialised investment fund (SIF)
c) The reserved alternative investment fund (RAIF)
d) Securitisation vehicles
e) A Luxembourg company
4. Concluding remarks
Oliver R. Hoor, Tax Partner, ATOZ Tax Advisers
Oliver is a Partner in the International and Corporate Tax department of ATOZ. A tax professional since 2003, Oliver has experience in Luxembourg and international taxation with a focus on alternative Investments (private equity, real estate, sovereign wealth funds, hedge funds), mergers & acquisitions and multinational groups. Oliver advises clients on all direct tax aspects regarding deal structuring, maintenance, reorganisations and exit planning.
He is Head of Transfer Pricing and the German Desk. Oliver is further a member of the tax working groups of the Association of the Luxembourg Fund Industry (ALFI) and the Luxembourg Private Equity Association (LPEA).
Oliver is the author of more than 250 articles and books on Luxembourg and international taxation including Transfer Pricing and related documentation requirements, the OECD Base Erosion and Profit Shifting (“BEPS”) Project and the EU Anti-Tax Avoidance Directives (ATAD 1 & 2), reporting obligations of tax intermediaries (DAC 6), the OECD Model Tax Convention and Tax Treaties, EU Law and the State Aid investigations of the EU Commission. He is also a regular speaker at conferences as well as a lecturer with House of Training, Legitech and ILA.
Oliver is qualified as a Chartered Accountant in Luxembourg (“Expert-Comptable”) as well as a certified German tax adviser (“Steuerberater”). He holds a post-graduate degree in Luxembourg Tax and a degree in Business Administration with a major in Tax from the University of Applied Sciences of Trier (Germany).
The Legitech company has obtained the approval of the Luxembourg Bar.
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