The cold, wet, and miserable weather does nothing to dampen Jason ‘IPO’ Lee’s spirits as he arrives at Findel after a grueling journey from Hong Kong. He has chosen Luxembourg as a launchpad for the European arm of his AI fund.
Jason’s confidence is at an all-time high; over the past year, his fund—established just five years ago—has successfully IPO‘d two portfolio companies. He believes his team has crafted a unique investment strategy poised for replication in the EU.
Ironically, Jason is disappointed to find that none of the ride-hailing apps—key companies his fund invests in and that he regularly uses—are available in Luxembourg. Rather than a setback, he views this as a gap in the market ripe for exploitation.
After stepping outside to wait for a taxi the old-fashioned way, he meets José, his driver, who swiftly takes him to the Hôtel Le Place d’Armes. After an uneventful evening, Jason finds himself missing the vibrant culture of his home city.
In Hong Kong, he has been exceptionally successful in raising capital from investors he met at local conferences, and he hopes to replicate this success in Luxembourg. However, as he sets out the next morning for his first networking event, reality quickly sets in.
Regulatory focus
While the event is easy to access and well-organized, Jason is disheartened to find that the content and speakers are overly focused on regulatory aspects of private equity. There is a glaring lack of emphasis on investment and fundraising—the primary reasons for his trip.
In multiple conversations, his enthusiasm for the potential of his AI fund is met with skepticism regarding compliance within the EU. This overshadows any discussion on launching the fund promptly, leading to further frustration.
Monotonous community
After another uneventful evening in the centre of Luxembourg City, Jason approaches a new day of networking with renewed optimism. Unfortunately, he continues to encounter the same individuals from the previous event, with few limited partners in sight.
At least he leaves the conference with a clear understanding that Luxembourg is well-equipped to handle the legal and administrative aspects of a fund; the abundance of service providers is reassuring, yet lacks the dynamism he seeks.
Lack of key decision makers
On his final day in Luxembourg, as he heads to yet another networking event, Jason realizes his expectations for the trip were naive. Despite the presence of many large private equity players, their front office teams are not located here.
Frustratingly, he is unable to connect with any key decision-makers from large institutional Limited Partners. As he boards his Luxair flight to the Côte d’Azur, Jason resolves to leave the establishment of a Luxembourg presence to his legal and compliance teams.
He knows his focus needs to shift to more dynamic events in places like Cannes and London, which he has heard are more centered on deal-making. Jason ‘IPO’ Lee won’t be back and says “Äddi” to Luxembourg.
Gregory Kennedy is a columnist for Investment Officer Luxembourg. His columns appear every other week. He also works as a business development manager at Finsoft Luxembourg.
