Lancement du Luxembourg Future Fund 2 (LFF 2)

The Luxembourg issued a press release, informing about the joint launch of the Luxembourg Future Fund 2 (LFF 2) on 17 March 2023 by the Ministry of Finance, the Ministry of the Economy, the Société nationale de crédit et d’investissement (SNCI) and the European Investment Fund (EIF). With a total of €200 million in financing commitments, LFF 2 is the successor initiative to the existing Luxembourg Future Fund (LFF 1), which reached the end of its active investment period.
LFF 2 aims to stimulate the diversification and sustainable development of the Luxembourgish economy via funding activities, with a focus on investments across sectors including climate technologies, Fintech, cybersecurity, energy resilience, life science and medical technologies, as well as new space technologies. The launch of LFF 2 highlights the successful cooperation between SNCI and EIF aiming to fund innovative projects in Luxembourg and further diversify the economy.
Like its predecessor, the new LFF 2 will target risk-adjusted financial returns while simultaneously stimulating the diversification and sustainable development of the Luxembourgish economy with investments across a range of sectors. However, compared to LFF 1, the investment scope has been broadened, and LFF 2 will now include investment funds and businesses already established in Luxembourg, allowing these entities to expand their local operations further. LFF 2 will also target more mature innovative businesses by providing hybrid debt-equity investments. These less dilutive investment instruments may appeal to companies unwilling to give up further equity stakes. Thus, the addition of hybrid debt-equity investments will allow LFF 2 to invest in companies at different stages of development.
In line with the existing LFF 1 initiative, investments under LFF 2 will continue to take place in the form of fund commitments and/or co-investments. Investments will also be considered for more mature companies facing complex and uncertain market environments, including businesses currently exposed to changes in digitalization, supply chain disruptions or companies transitioning to a low-carbon business model. As such, LFF 2 will provide an important tool in driving forward the diversification of the Luxembourg economy and the development of its strategic sectors by cooperating with the private sector in pursuit of sustainable innovation in Luxembourg.